EUROPE - David Wright, deputy director-general of the Internal Markets and Services division at the European Commission (EC), has warned current accounting standards are a key obstacle for cross border activity.
Speaking at an AEIP conference in Brussels about occupational pension funds in Europe on Friday, Wright said: "Increases in longevity are exacerbated by changes in accounting standards - this is a key area where we have to move forward."
The issue is "one of the key policy areas where we are focussing on," he told delegates, and more particularly the DG is looking at the question of whether the current framework on pensions accounting and the valuations is the right one.
Wright said the directive for institutions for occupational retirement provision (IORPs) has widened the scope for cross-border pension services, even representing a first step towards an internal market, but said the take-up has been slow.
One of the reasons could be accounting standards, according to Wright, as the standards have increased an awareness of high costs.
"Accounting standards are one of the evaluation issues, right at the heart of this debate of financial terms," he suggested.
Other explanations could also be tax laws and social labour laws across the member states, which according to the EC, complicate the conduct of cross-border business.
Wright also urged the International Accounting Standards Board (IASB) to make progress on insurance accounting, arguing: "I don't hear too much about it, but still much needs to be done," he told IPE.
Though the IASB has to finalise its work and finish the standards, this might still be some time away, said Wright in an interview.
He concluded the current financial market turbulence might be helpful: "Many now focus on what assets are worth in a complex market and how you should value over a longer period - in a way that might trigger some action."
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