Europe’s main fund management trade body says 100% of asset managers want to participate in its proposed cross-border personal pension product.
The European Fund and Asset Management Association (Efama) idea for a ‘European Personal Pension’ would allow asset managers to gain economies of scale by centralising certain functions to do with administration and investing.
Efama says the desire to centralise these functions is the main survey finding of its corporate members.
The Efama proposal follows an earlier Efama recommendation in 2013 for a European brand of personal pension product. The latest report deals with issues not previously raised, such as how personal pension providers would adapt their business models, and options for default funds.
A cross-border pension product would allow EU citizens to move between countries and keep up their pension savings. Common product rules are necessary for this and would facilitate capital flows across the EU, enhance cross-border pension competition, and support the EU objectives of creating a capital markets union, says Efama.
The product would also disclose all charges in a way the public could understand. Efama notes costs to pension savers are particularly important and quotes an International Organisation of Pension Supervisors 2012 report that noted a 1% annual management charge could reduced a pension pot by 20% over a 40-year period.
Efama has renamed the product as the ‘European Personal Pension’ after comments from members who felt the original moniker – the ‘Officially Certified European Retirement Plan’ – would not facilitate public understanding.
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