European Policy Analysis Volume 2, Number 1, Spring 2016 | Page 52

Second Tier, Second Thoughts

Question 22, the last one
considered relevant to the tax topic here,
returns to the core of the relationship
between 2nd tier regulation and
differences in member states’ tax policies.
EIOPA asked: “How could the 2nd
regime accommodate the tax differences
among [member states]?” (EIOPA 2013).
FSUG, the Financial Services User
Group—a forum created by the European
Commission which also appoints its
members—had already answered this in
its statement pertaining to Question 14:
“Creating a 2nd regime […] might speed
up the process toward full harmonization
across the EU” (EIOPA 2014a, com. 330).
This is clearly a minority view among
stakeholders; yet, it is about the only
perspective under which EIOPA’s initial
treatment of the tax issue might actually
make sense. ANASF bluntly states how
it might be done: “The second regime
could arbitrarily establish univocal rates
automatically, independently from the
MS” (EIOPA 2014a , com. 475).

the distribution of market shares between
different (types of) PPP providers. This is
not just due to the questionable demand for
a pan-European PPP, but more importantly
because of its potential repercussion on
national markets. The Association of the
Luxemburg Fund Industry points out that
“it should be taken into consideration that
the key features of OCERPs may in due
course become a model of best practice for
the provision of pensions when designing
national pension solutions” (EIOPA
2014a, com. 59).

Advocates of the introduction of
a 2nd tier often have specific suggestions
as to the nature of the product it ought
to feature, apparently depending on their
competitive edge and often referring to or
further detailing either the OCERP or the
EPP template already mentioned (cf., e.g.,
EIOPA 2014a, gen. com. 3, 5, 10, and 25).
The broader the mantle of a stakeholder
group, though, the less specific its
suggestions tend to be, which reflects the
more diverse interests it represents.21

Furthermore, the divide between
insurers and basically all other types
of suppliers that were already touched
upon in the last section reaffirms itself
regarding the topic of diverging provider
interests. EIOPA asked in Question 2
of DP-13-001 whether it should focus
its regulatory efforts on DB or DC
products.22 The result could not have

Topic 2: The Interests of Different Providers

Whereas the taxation issue
primarily concerns public finances and,
thus, distributional conflicts between
jurisdictions (plus maybe between the
public purse in general versus pensioners),
the development of a 2nd tier also affects

21

Another pattern that emerges from a sorting of stakeholder comments is that the enthusiasm for
a completed single financial market is higher in smaller member states. This tendency is especially
noteworthy among the answers to Question 4 about the advantages of the Commission’s initiative (cf.
EIOPA 2014a, com. 102–109 and 111–124).
22
Both are capital-based, yet DB (defined benefit) products guarantee a certain pay-out, DC (defined
contribution) products a certain investment. Switching from DB to DC, which is a major trend in occupational pensions these days, implies a transfer of market risks to future pensioners.
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