Guindos insists on making pension plans cheaper, which is the most obvious and essential way to cut costs with these investment products. Both the government and the Organisation for Economic Co-operation and Development (known by the acronym OCDE in Spanish) has said that these plans are too expensive for saves. They are so costly that Rajoy and his staff have had to lower fund manager commissions.
But more must be done. For example, more people should be able to access their funds. Right now only those enduring a long period of unemployment can use their funds without penalty. This step would increase competition among fund managers, which would cause a price war that ultimately benefits clients.
Still, the issue is not so much the cost of these plans, but the need to reduce stiff regulations in an industry that accounts for only 8% of GDP in Spain. In other countries in the OCDE, that number is 70%.
