The European Association of Paritarian Institution’s (AEIP) is working on a continent and sector-wide pension system for the building industry. Francesco Briganti, director of AEIP’s Brussels office, says it aims to create a sector-wide social scheme that could eventually pool pension contributions. Overall benefits would be the spread of best practice in this vast industrial sector.
The AEIP, which represents employers and employees, reported that 2009 turnover in the EU’s construction sector was €1.173trn - nearly 10% of total GDP. The sector’s three million firms - mainly small businesses - employ around fifteen million people. But the high turnover of labour creates many social challenges, including for workplace supplementary pensions.
Harmonising pensions across borders, says Briganti, is severely hampered by the variegated nature of pension systems. Briganti believes the only practical way of achieving a pan-EU pensions scheme would be via a series of incremental cross-border agreements between national partners. The idea of any binding instruction coming from the EU would be fruitless, he believes.
Organisations involved in improving co-operation for employees and companies include the European Federation of Building and Wosod Workers (EFBWW), and the European Construction Industry Federation (FIEC). For its part, the AEIP has set up three working groups covering pensions, paid holiday schemes and health and safety at work.
An emphasis has been placed on developing the newer, east-European member states, such as Poland, where there is not the attitude that employer representative bodies and trade unions are supposed to be in conflict.
According to Briganti, one positive outcome has been the appreciation of the need for cross-border social protection, achieved at a conference in Warsaw in March 2008. Another positive point is the existence of paritarian systems in many EU member states. However, their main activity often varies. The Spanish Fundacion Laboral deals only with health and safety at work. Bulgaria’s operation also only covers health and safety.
But workplace-based supplementary pension funds, topping up national schemes, are already in place for construction in Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Italy, the Netherlands, Sweden and UK.
Briganti said bilateral agreements are one way of advancing pensions harmonisation, for example, the paid holiday agreements between companies in Germany, Italy and Austria.
In Germany, the Zuzatzversorgungskasse des Baugewerbes AG (ZVK) manages a fund for supplementary pensions. ZVK operates under as SOKA-BAU, covering 70,000 domestic and foreign construction companies. Around 620,000 employees and some 420,000 retirees are covered. In 2009, SOKA-BAU had €5bn assets.
In the UK benefits are provided by the B&CE Benefit Schemes under an industry-wide agreement, which covers pensions, accident and life cover and paid holiday schemes. A lump-sum retirement benefit scheme was closed in 2001 and still has £700m (€805m) invested. The replacement stakeholder pension scheme has over £700m invested for some 500,000 members.
France has PRO BTB, with 3.7m members, and employers contribute to retirement funding. Other benefits include schemes to cover families in the case of illness, disability and death, health, social aid, and even the provision of holiday locations.