to accumulate, especially when the effects of hyperbolic discounting and temporal myopia are the most acute. Education and reinforcement need to be ongoing throughout the consumer’s working life.

**Robust legislation should regulate all the parties who are in a position to affect consumers’ choices** – pension fund management, financial advisors and pension fund agents. The focus of the legislation needs to be on these parties acting in the best interest of consumers. They have to be able to understand the consumer’s needs and objectives and his or her level of understanding of financial products. They have to know the pension products in the market and, based on that knowledge, match the products with the individual consumer’s needs and objectives. These parties should be liable to the consumer for any advice which is given that does not match the disclosed needs and objectives, and where these parties have acted in their own interest at the expense of the consumer. The consumer should have access to a simple and cost-effective mechanism when seeking recourse against these parties.

**Disclosure for private pensions needs to be considered at two levels** . Those parties who benefit financially from the relationship with consumers, such as agents and financial advisors, need to disclose the financial benefits they will derive from the relationship. The management of pension funds must provide information that is meaningful and easily understandable by potential contributors. Disclosure must be tailored to the needs of consumers having regard to the level of financial literacy and not be so complex that consumers need professional advice in order to understand it. Disclosure of fees to be paid to pension fund management companies and administrators is a particularly important and troublesome issue and requires significant attention. Some countries allow fees to be charged to contributors and additional amounts to be deducted from the earnings of the fund. This method is considerably less transparent than charging fees directly to contributors. Any disclosure should provide real information about the basis on which fees are charged and the effective fees charged, to enable consumers to compare among different offers. On an ongoing basis, for existing consumers, pension fund management companies should be obliged to provide information about the risks and the current performance of funds that is meaningful and comprehensible and emphasizes the long term, not the short term, performance of the funds. Ongoing disclosure is subject to the same caveat—contributors should not need to seek professional advice to understand it.

# **Protection of Credit Data**

**Data protection legislation directly impacts data processing by private sector institutions such as banks, non-bank credit institutions and credit registers.** The various national approaches to data processing reflect different historically used approaches and different legal origins. The basic rules of data protection refer to legitimacy of data processing, purpose of collection, limitations on data collection, and necessity and principle of proportional data processing. These are at the same time the main regulations of data processing by credit registers. Regulators have to ensure that: (1) the balance is maintained between the legitimate interest of the data controller and the rights of the data subject; (2) the relevant, adequate, and non-excessive nature of the data processed is proportionate to the determined, explicit and legitimate purpose for which it is collected and/or processed; and (3) the fact that data should be kept only as long as it is necessary. Even at the level of the EU where data protection is regulated by the European Data Protection Directive, implementation differs among member states. The difference relate not only to the different emphasis placed on the principles stated above but also the authorized purposes and authorized actors for exchanging credit data.

**The main objective for creditors accessing credit data is to obtain reliable and up-to-date information that enables them to assess the credit risk of potential borrowers and facilitates the monitoring of existing credits.** In some countries, additional authorized purposes may also include fraud prevention, other related credit risk and affordability uses, such as preventing over-indebtedness by consumers.

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