EUROPE – Cross-border pensions rules should be changed -and soon - says accountants and business advisory firm Mazars.
The call follows estimates that British workers alone are being barred from paying over 300 million pounds (423 million euros) into their pensions every year.
Mazars’ research indicates that more than 50,000 British nationals are currently working in Europe, and that many individuals are paying a heavy price in terms of their pension rights. Mazars estimates that the amount of pensions money that British workers are currently barred from paying is in the region of 300 million pounds a year.
“A recent case in the European Court of Justice (Skandia/Ramstedt), decided in June 2003, is pointing the way towards recognition of pension funds across borders, but, in practice, the single market in pensions is far from complete, and many barriers still exist,” says Mazars.
“Member states are still fairly slow in recognising that there are anomalies in the area of cross-border pensions,” says Rodney Taylor, tax director at Mazars, highlighting the country members with a generous state system and underdeveloped second pillar system as the most difficult.
But it is not only UK workers that are losing out on their pensions stresses Taylor – “it’s a general problem for foreigners working abroad unless they are employed by a multinational”.
“The ECJ is heralding the way to a single market for funded pensions, members states should fall in line as quickly as possible. A fairly common view is that we’re still five years away from cross-border pensions, but even this could be optimistic as the EC has a habit of dragging its feet,” says Taylor.