European-wide pensions regulation could damage the progress of auto-enrolment and stifle market innovation, UK bodies have warned.
The European Commission launched a consultation in April on consumer protection in personal pensions. The consultation paper aims to assess the need for action on personal pension schemes at an EU level and collect views on whether self-regulatory codes or a certification scheme could increase consumer protection.
In its response, published earlier this month, the Association of British Insurers says: “The regulation of pensions should not be harmonised at a European level.
“Any intervention would remove the ability of member states to regulate according to the features of their own market and could impede them from developing solutions to a lack of savings.”
The ABI adds: “We would be very concerned about auto-enrolled pensions being included in any future pension initiative. Any attempt to set out a standardised disclosure or sales regime could have major consequences.”
The FCA says in its response that while there “could be a role” for self-regulatory codes or a certification scheme, the latter would need to be tailored to each member state and would risk stifling innovation or limiting consumer choice.
The National Association of Pension Funds says: “The UK has a mature regulatory regime and compliance with different regimes could create additional costs for savers.”
Keyte Financial Planners director Robin Keyte says: “Any legislation which makes auto-enrolment complicated to run would be concerning.”