The European Commission has published its strategy on strengthening the continent’s financial system and boosting investment into productive finance via a new Savings and Investments Union (SIU).
The new initiative, references the success of auto-enrolment in the UK. It says its own initiative aims to offer EU citizens broader access to capital markets and better financing options for companies. The EU says this can foster citizens’ wealth, while boosting EU economic growth and competitiveness amid global challenges.
The move was welcomed by PensionsEurope, the national association of pension funds working across the EU, which welcomed the focus on AE. It pointed out that such initiatives have proved “highly effective” in driving scale, boosting pension coverage and addressing issues of adequacy. This can help support investments into
PensionsEurope strongly supports the proposed policy measures in the SIU, which, if effectively implemented, could significantly enhance pension coverage and adequacy across Europe.
It points out that AE also been successfully implemented in Lithuania and says Ireland’s upcoming 2025 scheme is expected to bring 800,000 additional workers into occupational pensions.
PensionsEurope highlighted proposals to o integrate SIU measures into country-specific recommendations within the European Semester. It says that while pensions remain a national competence, PensionsEurope believes the European Commission should fully leverage the existing governance framework to encourage and support member states in implementing meaningful reforms.
However, it says its plan to launch these pension-related initiatives in Q4 2025 will require careful planning and adequate resources from European institutions and key stakeholders.
A stable and supportive regulatory environment for pension funds is crucial, particularly with upcoming reviews of existing directives affecting the pension market. PensionsEurope says there is a need to ensure the directive remains a robust and stable framework for Institutions for Occupational Retirement Provision (IORPs) across Europe.
PensionsEurope also stresses the importance of improving savings and investment products under the SIU. The initiative should prioritise the development of simple, investment-friendly savings accounts, drawing inspiration from successful national examples.
A central challenge of the SIU is mobilising more private investments into critical sectors for growth. While PensionsEurope supports ongoing EU, European Investment Bank (EIB) Group, and member state efforts to create investment opportunities in underfunded sectors such as venture capital and private equity, it asserts that the fiduciary duty of pension funds must never be compromised for broader policy objectives.
The SIU aims to clarify the prudent-person principle’s impact on pension fund investments. However, PensionsEurope notes that the IORP II Directive already allows pension funds to invest in private equity and venture capital within prudent risk management parameters.
Geographical diversification of investments is another key consideration. PensionsEurope argues that allowing flexibility in investment geography and asset classes—while maintaining simplicity for savers—will be essential to long-term investment success. Additionally, the organisation calls for further development of Europe’s capital markets, particularly in securitisation, as a means of deepening market liquidity and improving investment opportunities.
PensionsEurope highlights the role of attractive tax incentives in promoting both funded pensions and broader savings and investment initiatives. While tax policy remains a national competence, the organisation believes the EU should encourage member states to introduce such incentives.
Commenting on the latest communication from the EU on this issue, PensionsEurope secretary-general and CEO Matti Leppälä says: “Europe is facing urgent challenges—declining competitiveness compared to the US and China, geopolitical instability, demographic shifts, and infrastructure gaps. Pension funds cannot solve these issues alone, but they can be part of the solution. The Savings and Investments Union has the potential to improve European capital markets, increase pension coverage and savings, and create better investment opportunities for pension funds. If the EU advances with smart, bold policy actions, pension funds can help drive a stronger, more resilient, and competitive European economy.”
It says that as these SIU proposals moves forward, all eyes will be on the European Commission’s ability to translate these ambitious proposals into tangible policy actions that strengthen the pension landscape and capital markets across the EU.
