Crunch hearing for pensions directive on Monday
EUROPE – The European Parliament’s socialist group is sticking to its guns over the question of biometric risk cover for occupational pension schemes ahead of a crucial amendment hearing on the European pensions directive on Monday (May 28).
The hearing in the European Monetary Affairs Committee (EMAC) will consider amendments to the Karas report on the directive, ahead of a vote by EMAC in June/July and then a subsequent plenary of the full parliament on the issue later in the year.
Wilfried Kuckelkorn, the European socialist group rapporteur has forwarded his amendments to Austrian MEP and parliament rapporteur, Othmar Karas, backing the inclusion of full biometric cover.
“ Retirement pension schemes must include socially appropriate cover for certain risks linked to human life. Some of the main qualities of occupational retirement pension schemes are that they cover biometrical risks (death, longevity, disability) and guarantee the insurance contributions paid in,” he notes.
Karas himself is attempting to chart a middle ground by arguing that institutions should be required to offer biometrical risk cover as an option and indicate the relevant costs clearly. Cover, he says, could then be provided by the institution itself or via an outside insurance company.
Kuckelkorn is also backing the inclusion of life insurance companies within the directive; a subject that has raised hackles in the European pensions arena.
The German MEP, comments: “Financial institutions that already benefit from a community legislative framework should in general be excluded from the scope of this directive.
“ However, as these institutions may also in some cases offer occupational pension schemes, these occupational pension schemes should come within the scope of this directive.”
And in what promises to be a heated debate, the socialist MEP is also seeking the striking out of clauses that would permit pension scheme underfunding, arguing that to safeguard the “security of members and beneficiaries” the technical provisions of a scheme should be fully funded at all times.
Conversely, Karas himself has made amendments to his own report seeking to strike out the obligatory full funding concept, noting: “In cases of cross border activity the technical provisions shall be funded in accordance with the rules applicable in the home Member State of the institution.”