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

On 20 November 2025, the European Commission unveiled a comprehensive proposal aimed at strengthening supplementary pensions across the EU and streamlining rules governing sustainable financial products. These initiatives form part of the broader Savings and Investments Union Strategy, designed to enhance citizens’ retirement incomes and promote sustainable, growth-oriented investments.

Enhancing Supplementary Pensions for Better Retirement Security

Recognizing that public pensions may not suffice to maintain living standards post-retirement, the Commission emphasizes the critical role of supplementary pensions in providing additional financial security without replacing national pension systems.

Key proposals include:

• Pension Tracking Systems: EU countries are encouraged to develop comprehensive digital tools that offer citizens a clear overview of all pension rights and expected benefits from diverse schemes.
• Modernizing Occupational Pensions (IORP II Directive): Strengthening management and supervision of Institutions for Occupational Retirement Provision aims to safeguard savers and improve returns on pension savings.
• Improving Pan-European Personal Pension Product (PEPP): Measures to boost accessibility and reduce costs by removing existing barriers that have limited uptake.
• Clarifying Investment Principles: Refinement of the ‘prudent person’ principle to facilitate increased equity investments, both private and listed, by pension providers.

These steps collectively seek to expand pension coverage and optimize returns, aligning with each member state’s autonomy over its social security frameworks.

Simplifying and Aligning Sustainable Finance Disclosure Rules

To aid investors in making well-informed choices and reduce operational burdens on financial product providers, the Commission proposes targeted amendments to the Sustainable Finance Disclosure Regulation (SFDR):

• Streamlined Disclosures: Only the largest financial market participants will be required to report on environmental and social impacts, with product-level data disclosures limited to essential, comparable, and reliable information.
• Clear Categorization of Financial Products with ESG Claims:
  • Sustainable: Products directly contributing to sustainability goals.
  • Transition: Investments in entities pursuing credible sustainability transition paths.
  • Environmental, Social, Governance (ESG) Basics: Products incorporating ESG factors without fitting the first two categories.

Marketing and product labeling using ESG claims will be reserved exclusively for these defined categories, a major effort to combat greenwashing and improve transparency.

Next Steps

The proposed legislative amendments—covering supplementary pensions, the IORP II Directive, PEPP regulation, and sustainable finance disclosures—will undergo negotiation and approval by the European Parliament and the Council.

Why This Matters for Citizens and Investors

• For Pensioners and Future Retirees: Greater clarity and access to supplementary pension information and products mean improved retirement income stability.
• For Investors: Simplified and credible ESG disclosures enhance decision-making confidence and support sustainable investment growth.
• For the EU Economy: Promoting supplementary pensions and sustainable investments supports long-term economic growth, competitiveness, and environmental objectives.

Additional Resources

• Press release on supplementary pensions
• Questions & answers on the supplementary pensions package
• Press release on sustainable finance disclosure simplification
• Questions & answers on Sustainable Finance Disclosure Regulation

By addressing pension adequacy and enhancing transparency in sustainable finance, the Commission demonstrates its commitment to securing citizens’ financial futures and fostering sustainable economic resilience throughout the European Union.

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