Regulation for a reduction of annual cost of private pension plans

Public petition n°3998

Petitioner: Ricardo Alberto Gomez Nieto

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Entry fees for Luxembourg private pension plans (Pillars II and III) can reach 4%, and management fees up to 1.5%, despite many funds merely tracking or underperforming indices. These costs erode long-term returns. Parliament should cap entry fees and limit annual management fees to 1% (100 bps) to improve fairness and attractiveness.

This issue is widely shared by many beneficiaries of private pension funds (Pillars II and III) in the financial sector. The performance gap between Luxembourg pension funds and ETFs (Exchange Traded funds)-operating in a competitive market-investing in the same strategies and asset classes highlights the high level of fees charged by pension fund managers. Balanced regulation, consistent with the UCITS fund market (Undertakings for Collective Investments in Transferable Securities), is necessary.