Strengthening the supplementary pensions sector: a strategic priority for Europe

Europe’s pension systems, and with them the adequacy of citizens’ retirement income, are coming under mounting strain as demographic change accelerates. At the same time, the EU must mobilise long-term capital to strengthen competitiveness, productivity, and the digital and sustainable transformation of its economy.    

Germany’s insurance industry is well placed to contribute to both challenges. Insurers manage over €1.9 trillion in assets, with more than €500 billion already invested in enterprises, infrastructure, and the green transition. With 84 million life insurance policies and €102 billion in annual payouts, the sector offers broad access to secure long-term savings.  

In all of this, consumer expectations must remain at the centre.  A recent study shows nearly half of German savers value security over flexibility or returns. Pension products therefore must balance long-term investment in productive assets with the provision of reliable, trusted savings vehicles.  

Against the backdrop of the EU’s broader agenda to reduce regulatory burdens on the economy, careful consideration should be given to which proposals are genuinely appropriate, proportionate and necessary. At the same time, it is important to avoid adding complexity that risks outweighing potential benefits.  

In response to the Commission’s recent consultation on supplementary pensions, GDV highlights four key areas:  

1. Institutions for Occupational Retirement Provision Directive (IORP II) Review: We appreciate the upcoming review of the IORP II Directive. However, the current framework works well as a minimum harmonisation approach, making fundamental changes unnecessary at this stage. IORP II Directive is proportionate and risk-based, allowing national flexibility to consider national specificities. Further standardisation could undermine effective national solutions and increase bureaucracy. National competent authorities, like BaFin in Germany, are best placed to enforce prudent investment principles.  
2. Pan-European Personal Pension Product (PEPP) Review: German insurers welcome a modernisation and simplification of the PEPP framework. Uptake of the PEPP remains low due to its complexity and rigid design. Mandatory sub-accounts, rigid documentation, and a strict 1% cost cap discourage providers and limit flexibility.  
3. Auto-Enrolment: We support opt-out-based auto-enrolment with voluntary employer participation and flexible national implementation. Default products should be chosen locally, not imposed centrally.  
4. Pension Tracking: Germany’s Digital Pension Overview launched in January 2025 and covers all three pillars. However, citizen uptake is low due to limited access via online ID cards. Broader use requires simpler authentication and stronger public awareness. A successful system must be intuitive, secure, and efficient.  

The German insurance industry stands ready to support the EU’s efforts to strengthen supplementary pensions. By aligning long-term savings with productive investment, we can enhance retirement security while contributing to Europe’s economic resilience and transformation.