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IORP II: Not bad but could do better

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Jeremy Woolfe on the latest skirmish between Brussels and EU member states on the thorny issue of pensions

The European Commission’s conference in Brussels last week on the future of pensions was billed as a stocktaking exercise of reform developments over the past two years. It also had the objective of looking ahead.

On stocktaking, the consensus turned out as ‘not too bad, but could do better’. Twenty-three countries have managed to raise their official pensions age, and seven have linked it to longevity, commissioner László Andor was pleased to report. But equal treatment for the female gender remains one of the vital issues he noted. New thoughts? Yes, indeed!

Commissioner Michel Barnier emphasised that the subject of cross-border pensions needed a good looking into, and this was something that came up more fully the following day, at the presentation of IORP II Directive. Joanne Segars, chair at PensionsEurope, who wants to see “less red tape coming out of Europe”, called for efforts to centre on tackling the fact that half of European workers have no occupational pensions lined up.

Predictably, the UK’s pension minister Steve Webb heaped praise on the new British policy of allowing lump-sum beneficiaries off the hook of having to put it into an annuity. The British citizen’s innate sense of wisdom could be trusted not to blow any windfall on whatever, was the implied boast. Webb then urged against EU cross-border “excessive harmonisation”. After a slight hesitation, he softened this with approving nations “learning from each other”.

But Webb came up, unsurprisingly, with the best anti-EU barb. As for the European Insurance and Occupational Pensions Authority, he said: “No-one in the UK has ever even heard of it. [But] it’s creeping in.”

Not dissimilarly, “we can’t have legislation coming in through the back door” came from the boss of BusinessEurope, Markus Beyrer. He made it clear that pension funding has no “need for any extra capital”. That is a sentiment expressed at virtually every conference on the subject of pensions. Its repetition would make a parrot swell with pride. And, sadly, it ignores the key challenges of increased longevity, low fertility and the prospect of soup-kitchen lives for future retirees.

Also on the top table of the relevant panel, but generally ignored, was someone from the Commission itself. Nadia Calvino, a deputy director general, listened, once lightly scratched her face, but mostly she sat still. However, when something was said she clearly found to be particularly obstructive, her eyes turned up to the heaven. Ah! A Latin gesture!

At last her turn did come. “To think we can solve all our problems by working at national level,” she said, “is, I think, not very credible.”

As for the attacks on back-door legalisation, her answer was: “I have never seen the European Commission proposing anything out of the blue!” No doubt, she will have devoted many hours of her life to the Brussels activity of ‘committology’ – endless meetings for ‘stakeholders’ to have their say.

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