Danish pension funds would feel little impact under the European directive for occupational pensions in its current form, although they may be handicapped by any pan-European tax agreement due to the extensive nature of Danish regulation, according to Anne Sierson of Forsikring & Pension – Denmark’s insurance association.
Addressing the UK National Association of Pension Funds annual investment conference in Eastbourne, Sierson explained that as the proposed directive is aimed at pension institutions not yet subject to EU regulation and excludes those with less than 100 members, less than 20 Danish company pension funds would fall under its remit.
The reason for this, she noted, was that Danish pensions tend to be run by life insurance companies and so are subject to EU life insurance directives.
The only real impact of the occupational pensions directive in Denmark, she said, would be that those funds under its auspices would be able to up equity levels from the domestic legal level of 50% to the proposed 70% ceiling in the European law.
However, she warned: “If it will be possible to make tax deductible pension schemes in foreign pension institutions, the Danish pension institutions will have a handicap because of the extensive Danish regulation.
“And if this situation prevails the current regulatory system becomes unacceptable and probably also politically unsustainable.”