IPE AWARDS: Politicians fail to understand pensions

EUROPE - Politicians lack the basic financial knowledge for meaningful dialogue with pension funds, delegates heard at an IPE Awards Seminar in Vienna.

Jiri Rusnok, head of Czech pension fund association and former Czech finance minister, said: "The knowledge among politicians of the principals of how the financial world operates is not very high."

Speaking at an open forum asking pension professionals about politicians, Rusnok added: "There is a lack of better understanding, even of quite basic principals."

Richard Balfe, member of the European parliament and chair of the MEP's pension fund, added meaningful dialogue between pension funds and politicians is difficult because of the differing horizons of interest.

"Pension funds like to think they understand politicians, but they understand them rather in a way a mother understands a naughty child," said Balfe, arguing politicians are on a different side to pension funds.

Both Balfe and Rusnok said politics focuses too much on the short-term, which is "the root cause of the problem", added Balfe.

Rusnok, however, argued the lack of understanding because of the different time horizons of interest could maybe overcome by intensive dialogue.

"We still have a lot to do in terms of better understanding of the realities on both sides. The associations have to work on this, but so too do the politicians," he said.

Pieter Omtzigt, a member of the Dutch parliament for the Christiand Democrat party (CDA) however argued politicians are willing to look at the long-term implications of pensions funding.

Moreover, according to Omtzigt: "Voters understand immediately if you meddle with pensions," adding politicians in that sense "feel the heat" even more than pension funds would.

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