The European Court of Auditors has piled criticism on the EU for failing to create a strong occupational pension system in the bloc that would ensure adequate retirement incomes as populations age. 

Publishing a report on Wednesday, the independent body said the EU has so far been unsuccessful at boosting supplementary pensions to ensure adequate retirement incomes, with Europe’s pensions market concentrated in just a few countries. 

“In EU economies faced with demographic and fiscal challenges, supplementary pensions should become increasingly important,” said Mihails Kozlovs, the ECA member in charge of the report.  

“Unfortunately, neither employer-sponsored pensions nor the EU-wide personal pension have lived up to expectations, especially when it comes to cross-border operation. Extra steps must be taken to strengthen them,” he added. 

The ECA criticises a lack of transparency in the costs and returns of the schemes and doubled down saying the so-called ‘pan-European pension product’ is “not a viable saving option for retirement”. 

“Against the backdrop of an ageing population in the EU, the European Commission and the European Insurance and Occupational Pensions Authority (EIOPA) have not managed to strengthen the role of occupational, employment-based pensions in EU countries, or get the personal pan-European pension product (PEPP) off the ground,” the ECA said.  

The report coincides with the Commission planning to revisit the legal frameworks for pension funds and the PEPP as part of its work towards the Savings and Investments Union.  

While member states are responsible for pensions in their countries, the EU has regulatory powers regarding cross-border mobility, consumer protection and the internal market. The ECA noted that the EU has set ground rules for occupational pension funds and laid the foundations for an EU-wide personal pension.  

But it lamented that the cross-border activities of pension funds remain concentrated in the small number of countries where pension funds were traditionally found, and that the EU has created barriers through extra requirements for cross-border funds. The largest pensions markets in the EU are the Netherlands, Germany, Ireland and Italy. In Denmark and the Netherlands, pension fund assets exceed their respective GDP. Some other countries tend to rely more heavily on state pensions, including Austria and France. Attempts to reform pensions in France have been met with nationwide protests in the past.

The PEPP, in existence since March 2022, was conceived as a portable pension, but the ECA said a lack of tax incentives and a regulatory 1% cap on costs and fees have reduced its attractiveness. In 2025, there is only one PEPP on the market, with fewer than 5,000 savers and less than €12m (£10m) in assets under management.  

Access to information is a further issue raised by the audit body. “EU plans to improve transparency under the Capital Markets Union have borne little fruit,” it said.   

An EU-wide overview of state, occupational and personal pensions to help people understand their total future retirement income is still missing. Pensions dashboards address visibility, but currently only at country level. According to independent consultant Richard Smith, seven EU member states have a pensions dashboard – Belgium, Denmark, Estonia, Latvia, Slovakia, Sweden and the Netherlands – as does Norway.   

The EU was due to create an EU-wide dashboard, but the ECA report criticises that “by October 2024 the Commission was only starting the roll-out phase for the European tracking service on pensions, while it has not taken any follow-up action in relation to the European pensions dashboard since then”.  

Performance transparency is also a problem, the ECA argues, saying while Eiopa has initiated measures to improve information about pension funds, scheme members do not have full visibility around the performance of the underlying funds, including the costs to workers and the returns for retirees.   

“This is crucial because some pensions depend on investment performance, which is why occupational pension funds must also be supervised effectively,” the auditors noted.  

Elsewhere, low uptake of Eiopa’s initiatives by national authorities was blamed for the authority’s failure to ensure consistent supervisory practices across the EU.  

Occupational pension funds in the EU manage €2.8tn (£2.4tn) for about 47m people, but the importance of private pensions varies significantly among EU countries.