Setting the Scene

Changes in the EU’s demographic structures, in particular rising life expectancy and falling birth rates, represent a growing risk to the established pay-as-yougo state pension schemes. Coupled with other current developments, such as the gradual withdrawal of the state from its social security commitments, the increasing popularity of (indirect) investment in equities and the spread of nonstate pension provision, especially in the USA, this forms part of a raft of factors that are both a challenge to – and an opportunity for – the EU financial services industry to establish its (pension) investment funds as a supplement to state pensions.