Council mandate opens talks on retirement savings, sustainable funds and investor safeguards EU finance ministers have backed changes to two closely watched financial files, moving Brussels a step closer to…
Council mandate opens talks on retirement savings, sustainable funds and investor safeguards
EU finance ministers have backed changes to two closely watched financial files, moving Brussels a step closer to rewriting rules on pan-European personal pensions and sustainability-labelled investment products. The Council positions agreed on Wednesday are not final law, but they set the member states’ line for talks with the European Parliament on reforms meant to make long-term saving easier, clearer and more useful for Europe’s investment needs.
The decisions, announced in Brussels on 24 June, form part of the EU’s wider savings and investments union agenda. That project aims to shift more household savings into productive investment while giving citizens better options for retirement income, business financing and long-term wealth-building.
At the centre of Wednesday’s move is the pan-European personal pension product, known as PEPP. The Council said its position on the PEPP review would make the product more attractive, accessible and simple, while maintaining consumer protection.
A Push To Revive A Struggling EU Pension Tool
PEPP was designed as a voluntary, portable pension product that could follow workers across the bloc and complement public, occupational and national private pension systems. In practice, uptake has been weak, leaving EU policymakers searching for ways to make the scheme more viable for providers and more visible to savers.
The Council position would remove the current requirement for mandatory investment advice before selling basic PEPPs. Advice would instead be provided at the client’s request, while remaining mandatory for more complex, tailored products. Ministers also backed removing the 1% fee cap, a change supporters see as necessary to attract providers, but one that consumer advocates have warned could weaken cost discipline if not matched by strong quality controls.
The mandate also preserves more flexibility for basic PEPP portfolios, allowing up to 5% to be placed in assets beyond straightforward, non-complex investments. Employers could also contribute to PEPPs where agreed, potentially making the product more relevant in workplace savings.
The sharper political question is whether simplification can be achieved without exposing retail savers to higher fees, weaker advice or products they do not fully understand. The Council says its text strengthens product oversight governance, but it also removes proposed provisions on tax treatment, additional EU-level supervision powers and a value-for-money framework.
Sustainable Finance Rules Also Move Forward
Ministers also agreed a separate Council position on sustainable finance transparency rules. That file revises the Sustainable Finance Disclosure Regulation, which has been in force since 2021 and requires financial firms to explain how they handle environmental, social and governance risks.
The Council wants to replace existing market concepts with three clearer product categories: sustainable, transition and ESG basics. The aim is to reduce lengthy disclosures, make products easier to compare and cut the risk of greenwashing, where investment products are presented as more environmentally or socially responsible than they are.
Under the Council mandate, funds claiming sustainable or transition status would have to use at least three mandatory indicators from a Commission list when disclosing adverse sustainability impacts. Transition products involving fossil fuel companies would face an additional indicator, and would be possible only where firms allocate at least 20% of capital expenditure to EU taxonomy-aligned activities and have a clear, time-bound emissions reduction strategy.
The text also gives limited recognition to public-sector issuances in the transition category under certain conditions, reflecting the role of government debt in many pension and insurance portfolios.
Talks Now Shift To Parliament
Neither reform is finished. The Council mandates allow negotiations to begin once Parliament has agreed its own positions. Those talks are likely to expose familiar tensions: how far the EU should centralise financial oversight, how much burden should be removed from firms, and what safeguards ordinary savers need before Brussels asks them to take a larger role in financing Europe’s economy.
As The European Times recently reported, the savings and investments union is no longer only an institutional debate about capital markets. It touches pensions, consumer trust, start-up financing and the question of whether Europe can mobilise private savings without weakening public accountability.
Wednesday’s decisions give the Council a negotiating hand. The harder test will come in the final text: whether the EU can make financial products simpler without making them less safe, and whether a project sold as competitiveness reform can also deliver visible benefits for citizens planning for old age.
