EUROPE – A European Parliament committee has approved 24 compromise amendments to the European Commission’s so-called common position on the Pension Funds Directive aimed at promoting cross-border supplementary pension schemes.

“MEPs from the Economic and Monetary Affairs Committee approved on Wednesday a series of compromise amendments to a Council common position designed to pave the way for the operation of cross-border supplementary pension schemes across the EU,” said the European Parliament.

The amendments may prove unacceptable to the Commission as they concerned social aspects of pension provision. The Commission views the directive as purely a financial services instrument.

The pensions rapporteur to the committee, Austrian MEP Othmar Karas, tabled 21 last-minute compromise amendments to enable the vote to pass.

“The European pension fund 'saga' continues and the end of the story remains unpredictable,” said Leonardo Sforza, head of research and EU affairs at pensions consultancy Hewitt Associates.

He said the amendments, which he called “the fruit of a compromise driven by Karas” between the different political and national sensitivities, might be aimed at keeping all doors open and putting further pressure on the Council of Ministers.

“But it takes a big risk: if the majority of the European Parliament finally endorses the Committee's position, today's vote may further delay, and eventually compromise, the adoption of the Pension Fund Directive because it will not be easy to find in the Council a new majority inclined to accept all new changes,” Sforza said.

One amendment seeks to introduce a transitional period of five years for those states which do not currently operate the so-called prudent person principle.

Other amendments cover biometric risk such as coverage for disability – one area on which the Commission is unlikely to agree.

On lump sum retirement benefits, the committee voted for a compromise wording ”with the aim of ensuring financial security in retirement”. No stipulations are placed on such a benefit in the common position.

The committee also voted for the establishment of a coordination committee to “foster cooperation between the various national authorities and ensure a uniform application of the legislation”.

The Commission will review the results of the vote next week. The Parliament will vote on the directive at its March plenary session in Strasbourg.

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