Karas says directive unacceptable in current form

EUROPE – The European Parliament’s pensions rapporteur Othmar Karas has said the European Commission’s common position on the Pensions Funds Directive “cannot yet be accepted” in its present version, saying the social security of beneficiaries should be taken into account.

Karas, an Austrian MEP who deals with the proposed Pensions Directive for the European Parliament, says the parliament is glad that parts of its proposed changes have been incorporated into the common position, which was communicated to the parliament in November.

“However, the common position cannot yet be accepted in its present version,” Karas says in a draft recommendation prepared for the parliament’s second reading of the directive.

He recognises that the present draft directive is an “important step” towards promoting employee mobility. “Further regulatory measures are, however, needed to ensure the problem-free transferability of entitlements.”

“It needs to be stressed that we are dealing with a financial services directive that is meant to be a key step towards the completion of the internal market,” Karas notes. “However, it also deals with the second pillar of the pension system. This being so, it should not only create a framework for the capital market but also take into account the social security of the beneficiaries.”

He says it is “regrettable” that the Council of Ministers has taken two years to respond to the Commission’s proposal of October 2000 and agree on a common position.

He said five amendments have been reinstated from the first reading. They cover conceptual clarity (article 6) in the phrase ‘retirement benefits’, legal certainty and legal clarity (articles 5 and 9 (1)), social security (recitals and article 9) covering ‘biometric risks’ or optional cover disability, the protection of beneficiaries (article 11) and coordination committee (article 21).

The European Parliament’s Economic and Monetary Affairs Committee will vote on Karas’ report at its meeting on February 17, according to the committee’s website.