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ABSTRACT
This article asks whether the EU’s pension policy promotes and achieves financialisation of old age security. Financialisation in this context means financial market integration that, in conjunction with pension reforms in member states, creates a market-based mode of governance for old age security. After an overview of how significant private pension funds have become in the EU, the article takes a most-likely case study of financialisation, the Pan-European Pension Product (PEPP), to see how successful the EU’s pension policy proved to be in establishing the PEPP. The findings suggest that EU policymaking in pensions tries to instrumentalise financial market integration for pension provision but this does not necessarily lead to financialisation of old age security. Market integration is a multi-faceted process of creating, emulating and correcting markets that obstructs a single-minded policy thrust like financialisation.
Disclosure statement
No potential conflict of interest was reported by the author.
Notes on contributors
Waltraud Schelkle is Associate Professor in Political Economy at the London School of Economics (LSE).
Notes
1. In addition to the contributions in this issue, Belfrage (Citation2008: 290) finds that Swedish households have not turned from passive savers to active investors; Mabbett (Citation2012) shows that savers have to be ‘nudged’ to join private pension schemes in Anglo-America; and Natali (Citation2018: 459–60) notes varying degrees of financialisation in Italy, the Netherlands and the UK.
2. Gross means before taxes on benefits and without tax subsidies for pension savings because neither is comparable across countries (OECD Citation2017: 144).
3. The other four member states for ‘de-financialisation’ were Belgium, Finland, Italy, and the UK (OECD Citation2017: Tables 7.3 and 7.4).
4. I am grateful for background interviews with Per Eckefeldt and Luigi Giamboni (DG Ecfin), on 4 July 2017. They are not responsible for any misunderstandings and the following is strictly my interpretation.
5. EIOPA is the European Insurance and Occupational Pensions Authority, a regulatory agency created for the Single Market in financial services.
6. Similarly, labour and social law have seriously obstructed the proliferation of pan-European occupational pension funds, IORPs (Guardiancich Citation2011: 24–5).
7. PensionsEurope represents national associations of occupational and personal funded pension providers.
8. Rust (Citation2018). The Council had to overcome divisions regarding the question whether IORPs should be allowed to offer PEPPs; the compromise was that those who can offer personal pensions under national law should also be allowed to offer PEPPs. The Economic and Monetary Affairs Committee of the European Parliament finalised its position in September 2018 and the trilogue negotiations were to start around the time of writing.
9. However, biometric risks, such as survivor benefits, can be covered by a PEPP which favours insurance providers (Commission Citation2017a: 13, Art.42).
10. The only OECD countries that have developed annuities markets are Australia, Canada, Switzerland, the US and the UK (Stewart Citation2007: 3n). The UK market collapsed after 2015 when compulsory annuitisation of tax-subsidised pension savings was abolished.