EIOPA publishes a Report on Investment options in the interest of occupational DC scheme members

EIOPA’s latest report maps out the available choices that members of occupational DC pension schemes have in the European context regarding investment in their retirement plans. The report highlights the main issues that national supervisors strive to address in order to ensure the making of effective investment decisions (where effective investment decisions are defined as decisions made in the interest of members, working towards ensuring a sustainable level of pension income).

The report finds that in most of the member states, occupational DC pension scheme members do not have the ability to make investment choices or have a limited ability to do so (a limited set of choices).  Members' "investment decisions" in the report generally refer to the selection of options (when choice is available). This is because in most cases, investment strategy decisions are made on behalf of members by other entities from the pension systems.

The analysis of the information provided to EIOPA by Member States (about two thirds of EU/EEA Member States took part in the data collection exercise) has revealed the following issues in occupational DC pension schemes, which EIOPA may consider further:

  • better mechanisms and methods of improving suitability of investment options compared to target members’ risk and return characteristics;
  • methods of supporting third parties (e.g. employers) who make or frame investment decisions on behalf of members, where relevant;
  • improved mechanisms for providing relevant standardised and comparable information to help members making better investment decisions, in case they have to make such decisions.

The full report is available here