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Directive unclear on cross-border – Commission

EUROPE – The European Commission’s internal market arm has admitted that the directive on occupational pensions is “not clear” about cross-border activities.

“One of the main difficulties with describing how cross-border activity will work is that it is a ‘new’ concept and so we do not have existing examples to draw upon,” the Internal Market and Services Directorate General stated.

“Article 20 is not clear about the definition of some of the key terms. The key difficulty is when is cross-border activity triggered – is it the location of the employer or the employees, or both?”

The comments came in a case study on cross-border activity prepared by the DG’s Insurance and Pensions group ahead of a meeting in April about the transposition of the directive into national law. Member states had tabled nine questions seeking definition about cross-border activities to the Commission.

The document concludes: “As a result of the bilateral (at least) nature of the home-host relationship, there will need to be a common understanding across the EU of when cross-border provisions are triggered.”

It said the “key determinants” were member location and the laws that apply to the employment relationship.

The meeting came as the deadline for transposing the directive – officially known as the directive on Institutions for Occupational Retirement Provision – looms on September 23. It has emerged that 13 European Union member states have raised almost 50 questions about how to transpose the directive.

The questions cover all aspects of the directive and reveal a lack of clarity at the member state level about some of its key elements.

There are, for example, six questions on technical provisions and the funding of technical provisions and five on regulatory own funds.

The Commission put together four case studies to clarify the situation for specific countries.

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