EUROPEAN DIRECTIVE SPECIAL – The European Parliament has voted by a landslide two-thirds majority to adopt the Karas report for a directive on occupational pensions.
The vote just afternoon 12pm this afternoon was unanimous with 460 MEPs voting for and 109 against.
Astrid Worum, parliamentary assistant to Austrian MEP Othmar Karas,
says that the two-thirds majority sends a clear message to the Ecofin Council of Ministers that speedy progress is needed to bring the directive into legislation.
“ With hard work over seven months we have found a functioning system that will allow cross-border membership and security for the membership of schemes. We are trying to show the Council this!”
Worum notes that the directive’s passage through parliament received less resistance than expected .
“ There were questions over security of schemes on a European level, which were opposed, because we said it was a national competence issue.
“ On the coverage of liabilities the Socialists were also reluctant to accept the annual underfunding proposal with calculations based over one year, whereas they wanted 100% funding at all time - but this was passed.”
Significantly, Karas managed to re-introduce a motion on a level playing field for providers, ensuring that insurance companies will be covered by the directive.
“This was previously voted against, but we tabled it again and it was adopted.
“We said legally accepted institutions in Member States could offer pensions if they fulfilled the requirements.
“ From one country to another the conditions are very different, because for example in Belgium you have a second pillar based on insurance countries.”
“ We open the door for other institutions, which, if they fulfil the requirements, can also offer pensions in the second pillar.
“ It will leave the choice for members and increase competition and reduce administrative costs.”
Worum adds that on the question of authorisation for pension funds, the parliament made practical progress: “When an institution operates on a national level they should now just have to register with a supervisory authority, but they don’t have to wait for authorisation.
“ The idea is that the supervisory authority will control that institution sometime during the year and if there is a problem they will pick this up. It would be too bureaucratic to have to wait for their authorisation every time.
“ When they go cross-border though they have to have prior authorisation, because the management of the control is totally different due to the role of the host state in deciding what the socially applicable legislation is.”
The Parliament’s decision also urged Member States to adopt the EET taxation system in the non-binding ‘recitals’ segment of the report.