Jeremy Woolfe observes the the Economic and Monetary Affairs Committee’s public hearing from the sidelines and finds old arguments being rehashed and warning shots exchanged
The usual warning shots were exchanged as the European Parliament discussed changes to the EU’s occupational pensions legislation, with some speakers warning that parliamentarians should take care when implementing change.
Brian Hayes, MEP and rapporteur for the IORP directive within the Economic and Monetary Affairs Committee (ECON), fired back. Wrapping up the public hearing on the IORP II proposals, Hayes warned: “When you are dealing with other people’s money, you have to be very careful.
“Where we have people who sacrifice a part of the monthly, or weekly, income, to be part of deferred income, we cannot afford to take risks.”
On the matter of full funding, Hayes told the hearing at the ECON gathering that the matter should be seriously examined. “We should look for a ‘gold-standard’ across the board.”
Hitting yet another sore spot, that of cross-border arrangements, the centre-right MEP, who moved to Brussels in May 2014, noted that there was a need for a “fit for purpose” system as more and more people began moving across boarders.
Are the statements a good indicator of what Hayes will publish in his report on IORPs II, due before this summer’s break? Not if some of the bystanders have their way.
The IORP II proposal’s advance has been sluggish, going back to 2010, at least, when the Commission published its green paper on pensions. But two years earlier it had also considered reviewing some funding rules.
The current recasting of the existing IORP Directive from 2003 was published in March 2014. Then, the Commission’s revisions were focused on minimum standards on fund governance, minimum information rights for beneficiaries, and standards for prudential supervision by national authorities.
At the ECON hearing, Joanne Segars, chair of PensionsEurope, the voice of the sector, noted that, during recent Council of the EU discussions, certain points of “flexibility” had been agreed by member states. She asked the European Parliament to continue along the same line.
Another speaker, Klaus Stiefermann of aba, the German association for work-place-based pension provision, summed up opposition need for change. “I think we need only minimum standards,” Stiefermann said. “As long as we don’t have a pan-EU unified first pillar pension scheme, we don’t need unified systems for pillars 2 and 3.”
Conversely, another German, Green Party MEP, Sven Giegold, stressed that attention was needed to deal with underfunding, especially in the face of low interest rate returns.