BELGIUM – The Belgian association of pension funds, the ABFP, is the latest institution to criticise the Ecofin directive on pan-European occupational pension schemes. The ABFP believes the development of cross-border funds is not possible without harmonising tax and social security systems.
Belgium was the only member state not to agree to the directive at the Ecofin meeting earlier this month. it now has until the Seville EU summit on June 21 to sign up to the directive but a statement from the association makes that look unlikely.
It claims the Belgian government is concerned that the directive conflicts with the Vandenbroucke law in Belgium, which seeks to encourage the development of complimentary pensions schemes and that it will encourage the outflow of pension assets from Belgium.
“Basically the Vandenbroucke law is limited to domestic funds and makes no allowance for Europe-wide pensions. The government fears the directive will hinder the domestic reform programme and lead to a drain of pension fund assets out of Belgium,” explains Hugo Clemeur, general secretary of the association.
Clemeur says the ABFP is not interested in the wranglings over investment rules for cross-border funds but would support making Brussels a co-ordination centre for the new pan-European schemes.
“Nobody wants to see the large-scale transfer of funds from local markets. Some argue that home-based multinational asset management groups could help stop assets flowing to major centres like London. But it’s hardly a level playing field, given the size and number of firms that exist in some countries compared with others,” he says.