The European Federation for Retirement Provision (EFRP), which represents occupational pension plans in 17 EU and four non EU countries, celebrated its 25th anniversary in June.
Some 230 delegates attended an event to mark the occasion in Brussels on the theme of ‘Pensions in the 21st century’.
Speakers included Joaquín Almunia, European commissioner for economic and monetary affairs and Henrik Bjerre-Nielsen, chairman of the Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS).
“A European approach on work-based pension has come a long way during the lifetime of the EFRP. But we think the pace of change could be accelerated,” the EFRP says.
The federation was established in 1981. It developed out of national associations that in turn represented company-sponsored and industry-wide supplementary pension plans. In recent years, the EFRP has opened its membership to individual companies such as financial institutions and multinational employers through the creation of a ‘Supporters’ Circle’.
At the session, the European Commission’s proposal for a directive on pensions portability came under renewed fire from MEPs and industry groups.
Therese de Liedekerke, director of the social affairs department at employers’ body UNICE, said: “There are serious worries from the standpoint of the companies we represent.”
She cited tax obstacles and potential higher costs – which could discourage employers from offering pensions to staff.
And the ambiguous “fair adjustment” wording could in reality lead to compulsory indexation of pension rights she argued.
“The text could lead to great legal uncertainty,” she said, complicated by the different systems both across Europe and even within countries.
At worst the plan could even interfere with the organisation of member states’ own pension systems. “The proposal should be re-examined.”
She was supported by another speaker, Dutch MEP Ieke van den Burg, who said: “I am one of those who are rather critical of the_proposal. It’s over-ambitious but has a lack of ambition. It needs to be re-examined.”
The battle lines are being drawn between supervisors and industry practitioners over a proposal to include pension funds within the insurance industry’s Solvency II framework, became apparent at the session.
Henrik Bjerre-Nielsen, chairman of the Committee of European Insurance and Pensions Supervisors, reiterated his view that pension funds would come under the regime.
Solvency II, which aims to create a more risk-related solvency model, is to take effect from 2010. CEIOPS has complained in the past that it was taking up a lot of its resources.
“I anticipate that occupational pension funds will be covered by what I call Solvency II-like requirements,” Bjerre-Nielsen said.
Funds would have to explain to beneficiaries why they get less security than insurance, he indicated.
MEP Van den Burg commenting on the issue said that the European Parliament was “planning to take up this issue”.
She agreed with the EFRP that pension funds were different to insurers. “I think we really should underline the differences,” she said. The Solvency II approach could be applied to the pension fund industry – but not in “completely the same way”.
A major topic during the current Austrian presidency of the EU, has been “flexicurity”, said the Austrian state secrerary Sigisbert Dolinschek, when addressing the session. “Flexicurity is another important element in coping successfully with demographic change.”
He described this as a system that provides a safety net while simultaneously offering an incentive to carry on working. Such an approach would appear to be, he felt of central importance – especially with respect to the acknowledged aim of increasing the numbers of older employees. “At the centre of the debate is the question of whether the European social model is compatible with maintaining the competitiveness of the EU.”
Dolinschek added: “Countries are currently exchanging ideas and experiences on how a social safety net offering necessary protection can be combined with the adaptability (or flexibility) that is a major requirement for companies operating in a global economy.”