Pan-European pension plans as a way to cope with the risks of ageing, automation and new forms of work

The pan-European personal pension product (PEPP), introduced by the European Union in March 2022, offers a flexible and portable supplementary pension option for individuals across EU member states. The objective of this report is to investigate individuals' willingness to engage with PEPP and its potential impact
on voluntary pension plans. The report is divided in two parts: the first investigates the drivers of voluntary pension plans, focusing on mobility and technological change; and the second examines the attitudes towards voluntary portable pension plans. We use microdata from well-stablished European surveys such as SHARE, EU-SILC, and HFCS and an specifically designed survey of workers (and cross-border workers) in Luxembourg that includes a discrete choice experiment. The report highlights several results. Mobility within the EU27 has increased over time, indicating a future rise in the mobile workforce. SHARE data show that many mobile workers spent five or more years abroad, underscoring the importance of voluntary pensions for this group. EU-SILC data indicate a negative relationship between voluntary pension contributions and being born in another EU country, with higher routine task intensity further reducing contributions due to lower incomes. Demand for portable pension plans depends on the share of foreign-born EU individuals and the development of voluntary pension systems. The results from the new survey in Luxembourg
reveal that workers who perceive their jobs as vulnerable to technological change may be more likely to invest in voluntary pensions, with notable gender and age-related differences. The discrete choice experiment indicates that individuals may be willing to accept to accept a higher cost for pension management services if the pension plan is portable across the EU. On average, individuals could accept an additional loss of 3.6% in their pension funds for portability. However, there are also important heterogenous effects.