NewsSeptember  (26)

Better Finance: real pension fund returns – 2018

On the 9th of October, Better Finance hosted an event to present the 2018 edition of their annual review of the real returns of pension funds. This 6th edition covers new EU countries and monitors the performance of EU pension and long-term savings. Despite a 6 year steady increase in the value of the stock market, European pension savers have overall not benefited. The EU pensions landscape remains extremely fragmented, with a few very high performers such as Sweden, and many others lagging behind.

The total amount of money that Europeans invest in pension funds amounts to a total of €2 trillion, or 13% of the European GDP. This is a huge amount of money and the fact that many products are close to a zero real return even in the long run, is very disturbing. Indeed, it would seem that investing in a basic index fund instead of a pension fund would yield much better returns!

But pension products are often opaque and not very transparent, especially when it comes to tracking their performance against benchmark indicators, and being open about the net return after all of the fees (management fees, exit fees etc).

The key recommendations put forward by Better Finance to help improve the situation include:
– Simpler, more transparent and comparable products
– Better access to simple and capital markets products
– Better ensure “Long Term and sustainable value creation”

COFACE-Families Europe will keep reporting on the situation of pensions in Europe as this affects millions of families and their savings.

For more information, please download the full report from Better Finance’s official web page: http://betterfinance.eu/fileadmin/user_upload/documents/Research_Reports/en/Pensions_Report_2018_-_Final_Version_-_for_Web.pdf  

Or contact Martin Schmalzried: mschmalzried@coface-eu.org