The Brussels based European Federation for Retirement Provision (EFRP) has given a generally positive welcome to the European Commission’s working document, entitled ‘Supervision of Institutions for Occupational Retirement Provision’.
In its response – part of the confidential consultation process taking place in the Commission – the EFRP says it feels there is still work to be done to allow pension funds in the EU to “benefit fully” from the single market.
However, it applauds the document’s inclusion of proposals to liberalise investment practices and, importantly, the creation of procedures for cross-border membership of occupational pension funds.
“This is very much in line with EFRP’s key objectives. If implemented, a European pooled pension fund could well become a reality,” says the response.
The EFRP also notes that the commission document coincides with its own position on the basis for regulation – defining the ‘institutions’ which will be able to provide or manage occupational plans rather than trying to determine occupational plans themselves, known as the ‘product’ approach.
“The Commission has proposed to name target organisations ‘institutions for occupational retirement provision’ (IORP). This looks most appropriate to EFRP while it says what they are doing and captures the wide variety of financing methods for occupational provisions in member states,” the federation says.
Nevertheless, the EFRP points out its shared concern with the Commission over the extent to which measures should be decided at EU rather than member state level.
It also questions the intensity of regulatory burdens put on pension funds through the present proposals, noting that: “The inclination to put more administrative burdens on pension funds or to increase the scheme management costs disproportionately must be avoided.”
The European parliament is also set to vote on its response to last May’s communication on March 5–6, following discussions by the European Monetary Affairs Committee (EMAC) on amendments to working documents produced by its four ‘rapporteurs’ .
A spokesperson at the parliament, comments: “Following the vote the Parliament and the Commission will go into discussion. There is no timetable for a directive, but I think it will come very soon after the vote by the parliament in March.” Hugh Wheelan