The long awaited communication on European supplementary pensions was adopted by the acting European Commission in a surprise move in Brussels last month - guaranteeing its status as a building block for future legislation.
The action plan, born out of DGXV’s October 1998 financial framework and the deliberations of the former commissioner Mario Monti-led Financial Services Policy Group of EU finance ministers, provides a platform to the commission in tackling its three strategic objectives; a single market for wholesale financial services, open and secure retail markets, and prudential rules and supervision.
And significantly the communication envisages that any future EU action will focus closely on prudent man investment rules alongside specific tax arrangements for Europe’s pension funds.
A legal framework for integrated securities and derivatives markets will also head up the future commission’s agenda.
Monti commented: “I am confident that implementation of this action plan will be accorded the highest political priority because of a new awareness of the potential benefits the single financial market offers.
“This awareness stems notably from the introduction of the euro, the gathering pace of restructuring in the financial services sector and greater understanding of the need to take account of consumers’ concerns.”
Kees van Rees, chairman of the European Federation for Retirement Provision (EFRP), notes: “There is a major difference, of course, between a communication and a legally binding directive. However, this is certainly a major step forward and Monti seems to be trying to keep up the pace of change. When the new commission comes in they will have this communication waiting for them on the table. And more importantly, we really can’t afford to start this process from scratch.”
Van Rees believes there is still work to be done though to push the communication on further:
“The positive things are the focus on prudent man and qualitative supervision of pension funds. Acknowledgement is also made of the strong argument for greater equity investment with an asset liability backdrop, as well as the differences between open funds and closed industry plans.
“However, it falls short on pushing forward the pan-European pensions issue, which needs to be addressed - particularly the taxation question,” he says.
The earliest date given for reformation of the commission is September 13, when the European parliament will hold a four day plenary session to vote on potential candidates for the commission posts.
And speculation in the Italian press is that Monti may be the second Italian choice for the commission, following the election to the EC presidency of Romano Prodi.
Betty Olivi, spokeswoman for Mario Monti, commented: “It has been suggested that Prodi and Italian Prime Minister Massimo D’Alema decided Monti should remain as the second Italian representative, but we have no official confirmation of this.
“Mr Monti has said he would remain in the position if asked.” Hugh Wheelan