European Commission Proposes Measures to Boost Supplementary Pensions and Simplify Sustainable Finance Rules

On 20 November 2025, the European Commission set out a package. It aims to boost supplementary pensions and clear up rules for sustainable finance. This package fits the Commission’s savings and investments union strategy. The plan helps households build wealth and spurs economic growth and competition.

Boosting Supplementary Pensions for Adequate Retirement Income

Public pensions may not keep up with living standards when people retire. The Commission’s plan works on both the demand and supply sides of supplementary pensions. These pensions add to public pensions, not replace them. The plan includes:

• Pension Tracking Systems: EU nations build systems that show citizens a clear view of all their pension rights and benefits.
• IORP II Directive Reforms: The Commission updates the IORP II rules. This change backs better management and supervision, which brings stronger returns for savers.
• Enhancing PEPP: The plan makes the Pan-European Personal Pension Product (PEPP) more attractive, easier to use, and less costly by removing past barriers.
• Clarifying Investment Principles: The plan updates the ‘prudent person’ rule. This change pushes IORPs and PEPP providers to invest more in both private and listed equities.

These moves let each Member State handle its own pension system while aiming for better retirement incomes for all EU citizens.

Simplifying Sustainable Financial Disclosure Rules

The Commission also works to ease the rules for disclosing sustainable finance details. The goal is to reduce work for firms and clear up the market:

• Streamlined Disclosures: The biggest players share detailed environmental and social data. Smaller players now do less product-level reporting. The aim is to share data that is available, comparable, and clear.

• Clear ESG Product Categorization: The plan sets three clear categories for products with environmental, social, and governance (ESG) claims:

  • Sustainable: Products that help reach clear sustainability goals.
  • Transition: Investments that help companies move toward sustainability.
  • ESG Basics: Products that include ESG factors but do not meet the first two criteria.

• Combating Greenwashing: Only products in these categories can make ESG claims in their marketing and names. This move builds trust among investors.

Next Steps

The IORP II Directive, PEPP Regulation, and sustainable finance rules now move to talks. The European Parliament and the Council will discuss these ideas before they can become law.

Additional Resources

• Press release on boosting supplementary pensions
• Q&A on supplementary pensions package
• Press release on simplifying sustainable finance rules
• Q&A on Sustainable Finance Disclosure Regulation

The European Commission’s proposals take a clear step toward stronger retirement incomes. They also aim to create sustainable finance markets that are clear and trustworthy for EU citizens.

Design Delight Studio curates high-impact, authoritative insights into sustainable and organic product trends, helping conscious consumers and innovative brands stay ahead in a fast-evolving green economy.