EUROPE - The European Commission is to refer Italy to the European Court of Justice for not transposing the occupational pension fund directive into national legislation.

And the Commission has also begun proceedings against the Czech Republic, Hungary and Poland over the directive.

It said the uneven implementation of the directive is preventing cross-border pensions in the European internal market. The UK and Slovenia are already being taken to the ECJ over the directive.

"The Commission has decided to refer Italy to the Court of Justice for not having transposed Directive 2003/41/EC on the activities and supervision of institutions for occupational retirement provision (IORP Directive) into national law," the Commission said in a statement.

It added: "Italy has not yet replied to the Commission's reasoned opinion sent in April 2006." The directive should have been transposed by all member states by September 23 2005.

IPE reported this week that the Commission was planning further legal action against member states over the directive.

"Whilst recognising that member states' systems for occupational pensions differ widely, the directive provides harmonised rules for prudential supervision and capital requirements for these institutions," the Commission said.

"The directive also lays down rules for the cross-border provision of occupational pensions. The current asymmetric state of implementation prevents pension institutions from providing cross-border services under the same conditions throughout the internal market."

The Commission also said it has decided to send ‘letters of formal notice', the first stage of proceedings, to the Czech Republic, Hungary and Poland for the incomplete transposition of the pension directive.

It said: "The Czech Republic, Hungary and Poland appear to take the view that given the fact that there are currently no pension institutions in their countries falling under the scope of the directive, they are only obliged to transpose the directive to the extent that pension institutions established in other member states should be allowed to provide their services in their countries.

"The Commission takes the opposite view. Given that the directive contains no derogations or relevant transitional periods as far as the transposition is concerned, all member states have to transpose the directive in its entirety and establish a legal framework which would enable pension institutions to be set up even though they do not exist currently in these member states."

The countries have two months to reply to the letter of formal notice.