Substantial indications of the direction Brussels is likely to take on pension policy are emerging surprisingly early as a follow-up to the Commission’s policy paper of last July. Two influential European Parliamentary committees rushed to consolidate their positions to comply with a Commission request for response to its call for opinions under an extended deadline in mid-February.

The Economic and Monetary Affairs committee (ECON) articulated its views under stimulation of a Draft Opinion on the Green Paper, put together by Romanian MEP, George Sabin Cutaş. The Employment and Social Affairs Committee (EMPL), the lead committee, came in shortly afterwards with an approval of a set of amendments, working with its rapporteur, Dutch MEP Ria Oomen-Ruijten. The two sets of wordings were then hastily put together. The result, a 38-page report, includes a motion for the Parliament’s resolution, an explanatory statement, and the opinions of the two major committees, plus those of the committees on the internal market and consumer protection, and on women’s rights and gender equality.

The combined report praises the Green Paper as intending “to impart fresh impetus at national and EU level into the subject”. It repeats the obvious that the member states are all confronted with enormous challenges.

Is the Parliament’s comprehensive opinion within so few days a miracle of speed? In its pages there is plenty of material, true. Not surprisingly, much of it has appeared previously, from the parliamentary committees involved, and elsewhere.

The new document expresses one ideal after another, always well articulated, but not necessarily definitive. For instance, there are at lest two mentions of the importance of SME companies to the EU’s economy and the sector’s importance as an engine for employment. This is continued with “wishes” to see development to “increase affiliation of workers in SMEs to pension systems”. But how they should be persuaded to come up with the necessary funds is not discussed.

Another section looks into injustice to women. The report refers to giving rights, particularly regarding pensions, to people who devote time to bringing up children or caring for the elderly. It states that women face direct discrimination in different pensions-related aspects. It also mentions the “overrepresentation of women in precarious and part-time jobs”. It calls on action from the Commission and member states to eradicate these inequalities and suggests that this could be done through the inclusion of maternity leave and care for the elderly as “actual work”, giving entitlement to retirement benefits.
Later, the report questions “how solidarity [between men and women] should be financed”.

Emphasis is placed on EU legislation on insolvency. It observes that while relevant legislative provision may be “fairly adequate, the results can be inadequate”. It calls on the Commission to follow the implementation of the Insolvency Directive closely, and take action where justified. It considers that there is a need to strengthen EU legislation relating to employers’ insolvency “in order to offer all workers equal protection of their savings”.

Reference is made to the Parliament’s 2020 Strategy, aimed at bringing in one measure after another to bring the EU’s economic growth to well above the paltry level seen today. The Parliament paper offers its support to the strategy. It notes that an “active labour market policy which … will lead to increased participation in employment by those currently under-represented in the labour market”.

Here credibility raises its head. After all, the 2020 strategy follows of the Lisbon Agenda, adopted in 2010 to achieve by 2010 an EU economy described as “the most competitive and dynamic knowledge-based economy in the world capable of sustainable economic growth with more and better jobs and greater social cohesion”. In the main, it failed.

Of course, the character of the 1,600 responses from all other sources, that are likely to remain under cover for at least another month or two, are likely to be less than cohesive. Overall, desires for fair treatment for pensioners conflict with the possibility that funds to meet many well-intentioned wishes might simply not be available.

The ECON committee kicked off the present Parliamentary moves using a ‘compromise’ procedure. This consolidated former amendments its members had tabled to the Cutaş Draft Opinion in order to widen consent across different political groupings.

Such ‘opinions’, which are nowadays relatively common, provide light on what may come ahead. They also reveal key players. The author can be making a tactical move to place himself as a future ‘rapporteur’ (legislative co-ordinator) when the package eventually passes through the Parliament. This post holds additional influence as chair over any ‘trialogue’ meetings of the three main EU institutions.

In the ECON pension case, MEP Cutaş’s document comprises 24 ‘suggestions’ under the headings, pension framework, IORP Directive, solvency, insolvency, information, and policy co-ordination. As is usual, the suggestions tend to be innocuous, with a light touch for any political feelings.

Cutaş himself is in the S&D (socialist) party but his draft opinion hardly reflects much political bias. This would be normal in such cases, because, for example, he cites a non-contentious call that obstacles to international and cross-border mobility must be removed. He insists that facilitating workers’ mobility with portable pensions both from employer to employer and cross-border is critical to improving citizens’ confidence. Cutaş’s technique certainly broadened harmony across different political parties. It could contribute to a quicker agreement on a Directive following on from the Green Paper than occurred, for instance, with the Alternative Investment Fund Managers’ Directive, which dragged painfully.

Throughout the session there seemed to be surprising convergence between the parties. In the ECON session, a typical compromise, supported across the party groups, including S&D, the centre-right EPP, liberal ALDE (Liberal), and the European Conservatives and Reformists (ECR), “considers that European citizens should be given maximum access to various ways of accumulating pension rights and recognises the need to improve the access of people to existing pension products”.

Under one of the compromises, supported by the S&D, EPP and ALDE parties, recalls that the European Insurance and Occupational Pension Authority “must make full use of its competence and play an important role in the preparatory process for a review of the IORP Directive”. Under another, the MEP for East England, Vicky Ford, received support for a full review on the European Institutions’ own staff pensions provisions, by June 2011, (formerly she had set an April deadline).

An interesting comment on the Solvency II issue comes from German MEP, Thomas Mann, who is vice-chairman of the EMPL committee. Mann tells IPE that any application of the solvency capital requirements for insurance to pensions is not necessary for Germany and other nations. He says: “In Germany and Luxembourg, for example, there is the Pensions Insurance Association [Pensions-Sicherungs-Verein], which provides protection in the event of insolvency.” The association proved its effectiveness during the crisis. If Solvency II were applied to the German occupational system, additional costs of up to 40% could arise.