The new EC green paper on pensions has received a broad industry welcome. The paper, 'Supplementary Pensions in a Single Market' has been promoted by Commissioner Mario Monti.

Alan Broxson, chairman of the European Federation for Retirement Provision says: At long last a paper tries to identify all of the problems for pensions throughout Europe and hopefully it will lead to a common approach to some of the solutions."

However disagreements about the paper have already surfaced with the UK's National Association of Pension Funds (NAFP) saying that it will strongly oppose any move to include the insolvency margin proposal in draft legislation.

The suggestion was initially put forward in a lobbying paper presented to the European Commission in Dec-ember by the Comité Européen des Assurance (CEA), called for the 4% margin as is required of life insurers.

The CEA has yet to make a response to the green paper but it has said that it will be in line with this submission.

The controversial passage in the green paper says: "The question also arises as to whether pension funds should be subject to rules similar to those that exist for life assurance on the liabilities side of the balance sheet - in particular is there a need to harmonise the technical provisions and the 4% solvency margin of own funds."

Describing the measure as his one major concern, Bill Birmingham, the benefits and services manager at the NAPF says: "We think that the insolvency margin is somewhat misconceived and we would strongly oppose its inclusion. We would oppose any suggestion that pension funds should be subject to a strict regime simply be-cause life insurance companies are."

Geoffrey Furlonger, a partner at William Mercer in Brussels suggests that the idea went against Anglo-Saxon thinking, an impression underlined by the fact that the Association of British Insurers (ABI) believes that pension funds and insurers should be regulated separately.

An ABI spokesman says: "We don't think that it is necessary to have ex-actly the same rules for life insurance and pension funds. We are all for opening things up, but because of the long term liabilities we feel that there is some scope for different regulation."

Furlonger adds that the pensions industry did not accept the need for a level playing field: "It sees it as comparing apples and oranges: insurers are professional providers of pensions policies whereas companies are not, so it is arguable they are not in commercial competition."

(See also pages 1, 6 and 24) John Lappin"

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