In the European Union, the availability of pension products is concentrated in several countries such as France, Spain, Germany and Denmark, with other member states like Slovakia, Hungary and Slovenia offering fewer options. An online survey conducted in 2017 by Aegon on the main sources for retirement incomes in Spain, Germany and France shows that 65 percent of respondents from Spain indicated they relied on government plans and social benefits, compared to France with approximately 46 percent of respondents. German respondents, on the other hand, indicated they planned to use their own savings and investments for retirement support. When looking at pension funds relative to the size of the economy, the total amount of assets held by Spanish pension funds reached 9.6 percent in 2015, with 6.6 percent the value reached in Germany and 0.6 percent in France. Pension funds in Switzerland, Iceland and the Netherlands, however, reached a share of GDP of 123 percent, 150 percent and 178 percent respectively.
With an ageing population, decreasing birth rates and heavy state pensions in some countries, encouraging Europeans as a whole to make personal savings for their retirement could help to lighten the load and help savers. Additionally, PEPP could provide an incentive to the capital market, offering an additional source of money to invest with. Because of the differences between the member states, some national markets tend to be more attractive to invest in than others. The return rate of pension funds, for example, varies per country. Finland, a country with approximately 49 percent in pension assets, had a return rate of 5.3 percent in 2015, whereas the Netherlands, the country with the most pension assets in Europe except for the United Kingdom, experienced returns of 0.6 percent during the same year. Any financial institution offering a PEPP is obliged to offer it in all countries of the European Union within three years after indicating they want to launch the product. This means institutions will have to invest in certain countries that do not immediately appear to be commercially attractive.
Whether a Pan-European pension fund will be successful is a question that cannot be answered yet. An important recommendation from the European Commission is that national governments offer the same tax exemption to PEPP like any other pension product in their country. If there is no tax exemption, the new product may attract limited interest, but if this does happen, it might be the first step in a new direction for the European pension landscape.