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IPE special report May 2018

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Bolkestein warns on market as directive nears

NETHERLANDS - Former EU commissioner Frits Bolkestein has called for European Union member states to be “market-conscious” when they transpose the directive on occupational pension funds into national law.

He warned that pension funds could relocate to more competitive member states.

Speaking of the directive, which comes in force on September 23 to pave the way for pan-European occupational pensions, the former commissioner for internal market said member states should “watch out” and not lose sight of pension funds’ interests.

“In the course of transposition, there are always differences in between member states,” he said and recommended that governments remember they are “swimming in a European sea”.

“I think member states ought to watch out for that date because if one looks at what happened in the area of UCITS it becomes apparent that Luxemburg and Ireland got
90% of the UCITS market and that is because they are flexible in their legislation.

“They may want to repeat the trick with pension funds.”
He was speaking at a conference organised by ABN Amro Mellon in Amsterdam.

Taking the Netherlands as an example, Bolkestein said: “The Dutch administration ought to be well-advised to look at the way it transposes the directive into Dutch legislation.”

Bolkestein, previously a cabinet minister of the Liberal Party, which is part of the ruling coalition, explained that if a Dutch pension fund moved across the border, it would trigger a series of relocations.

“The management would move, actuarial personnel would move, fund managers would move and so on. So it is quite an important issue.”

Bolkestein, who is also a professor at the universities of Leiden and Delft, suggested that governments also gauge the funds’ feelings with consultations. “It is a challenge for governments,” he observed.

“The pensions directive is an excellent directive, it offers a possibility for European pension funds. I think Dutch pensions funds should try to become European players but for that to happen legislation should be market-conscious.”

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