The EU should create a Europe-wide pension regime to make it easier for corporates with cross-border operations to provide for their employees, according to the European Financial Services Roundtable (EFR).
The 20 chairmen and CEOs that make up the EFR said yesterday that the EU’s current plan to embed new pension rules in European states will not address the issue quickly enough and will make it harder for companies to manage schemes across borders.
The EFR also highlighted the fact that individual regimes in different member states prevent employees from transferring pension plans across Europe. Research conducted by the EFR has discovered that widely divergent rules across Europe make cross-border pensions virtually impossible, and that rules are ?often so complex that even experts can’t understand them?.
Pehr Gyllenhammar, chairman of Aviva and the EFR, said: ?National structures should not be protected at the expense of the consumers. Having the same pension products provided and bought throughout the European Union would be of great benefit to the people and easier to regulate and supervise. It is the only way to go.?
The proposed pan-European regime would complement existing national pension structures, leaving them undisturbed. The EFR believes that once the European system is in place, market forces will encourage the convergence of national systems.
Henri de Castries, CEO of Axa and sponsor of the EFR steering group, explained the function of the EFR at its press conference in Brussels yesterday. ?At this stage the role of the EFR is not to define detailed specifications, but to describe the key features of a group of such products and trigger the debate. The creation of a European structure will inevitably take a number of years, so there is no time to lose.?
The EFR’s proposal will only add to the confusion among corporates over pensions requirements. A report from ABN Amro last week warned that with a year to go until the EU Pensions Directive comes into force, most UK companies, for example, are unaware of the Directive’s impact. The Pensions Directive will set minimum pension funding levels for European companies and a necessary timeline for reducing deficits.
