Directive hailed as 'revolutionary'
The European Commission’s draft directive on supplementary pensions could be the precursor to cross border recruitment raids by pension funds on employees working in similar professions, according to Karel Stroobants, head of the Belgian Association of pension Funds and the Brussels based VKG/CPM scheme for Belgian doctors and dentists.
“ The Commission’s draft proposal on cross border pension funds is a complete breakthrough.
“ If I look at what it could mean to my pension fund then it could be a threat or an opportunity.
“ I assume by this that perhaps the Dutch might come to Belgium and try to lure the Belgian doctors into their scheme, or alternatively I could go and try and tempt the French doctors away into my fund.
“ Of course, I would rather be on the offence and I applaud this development and will try to look for advantages for us within that. For me it gives opportunities and the pension fund market will become a lot more efficient as a result of this.”
In terms of the overall content of the directive, Stroobants comments:“ I’m not disappointed.
“ I find it is a big step forward, it gives the possibility to each country to use quantitative investment principles – but that doesn’t bother me. I am also happy with the inclusion of the statement of investment principles (SIP).
“ There may be a problem for countries outside the euro with regards to the 30% in outside currencies, but in my view they should just join the euro to solve the problem!
However, Cees van Rees, chairman of the European Federation for Retirement Provision (EFRP), has expressed his disappointed at what he sees as a shortfall in the directive for tackling Europe’s long-term demographic problems.
“ The draft directive is an initiative related to funding, but the problem in Europe is that there is too much dependence on the first pillar.
“ We don’t have that in the Netherlands and much needs to be done to face the facts in Europe because ultimately we will be hurt by a lack of action on this account.
Following the report from the Social Affairs directorate on the issue of sustainability of pension systems, Van Rees says he does not feel the Commission has gone far enough in answering its own questions. “Though some measures such as active ageing and flexible career ends have been proposed, the draft communication gives no firm recipes for tackling the future demographic problem. My worry is that by not facing up to this challenge we will really find ourselves in trouble. We see the draft directive as an important step though, with some reservations.
“The EFRP believes that the whole pensions question needs to be tackled and I am not necessarily too optimistic after reading this communication. It gives analysis as they always do, but then there is nothing that says ‘what are we going to do about it’.
“ Exchange of best practice is a start, but it will not be enough to generate in-depth reform.”