EUROPE - The challenge of progressing EU pensions policy along the lines suggested in the European Commission's Green Paper may seem overwhelming.

But delegates at the Eurofi Financial Forum 2010 conference in Brussels have heard that a realistic approach toward advancement could be to define a series of progress steps, or "pillars".

Pervenche Berès, MEP and prominent French socialist, said the complex fragmentation of pension systems across the Continent was good reason for the step-by-step approach. Berès is rapporteur for the European Parliament's Special Committee on the Financial, Economic and Social Crisis.

Also taking up the pillar formula, Chris Verhaegen, secretary general of the European Federation for Retirement Provision, observed that the "transitional", or staged, approach now required the spelling out of definitions of "pillars", or norms, to lay down objectives for the road ahead.

The conference also received a boost for the adoption of a version of the 28th Regime formula. This would entail the establishment of a package of legislation that EU member states could opt into on a voluntary basis. Jozef De Mey, chairman at Ageas, was one to support the Regime 28 argument. "If we go down this avenue," he said, "the pensions market can grow nicely."

On the vexing question of lack of harmonisation across Europe, De Mey noted that, at present, there is no competition between the member states. He went on to lament the lack of transparency and security, not to mention the feebleness of guarantees given to the beneficiaries. "There is a long list of things that need to be done," he said. "The central point is that pensions should be secure."

Similar views were expressed by Gabriel Bernadino, chairman of the Committee of European Insurance and Occupational Pensions Supervisors. Bernadino noted that the wide variations of pensions norms across Europe made for "an opportunity to build something that is far more consistent in its nature". At present, the pensions world in Europe has been characterised by "diversity in risk management, and other basic factors, such as the provision of information". This, he says, is clearly a shortfall: "Attention is needed to make more information available."

Bernadino, who said he could not see why some provisions in Solvency II could not be applied to pension legislation, concluded with the question: "Do we really need a completely new approach to pension systems in the future?" His response: "Yes, we do. Of course it will take time."

Further grievances about the status quo came from Angel Martinez-Aldama, chairman of the EFRP. He told chairman Karel Van Hulle, who heads the Commission's dealing with insurance and pensions, that in the 27 EU member states, at present only four or five have well-developed pensions systems. Overall, only 40% of workers in the EU are adequately covered, he added - thus, the need to increase coverage is a "most important issue for workers". 

At another time, Berès said she wanted to see an EU-level definition of the social aspect of the pension. This should cover, for example, the basic rights to receiving a pension. "Each EU citizen needs to get a decent retirement benefit," she said. On the question of mobility of workers across EU borders, she conceded it was important, but said it was "not going to be the biggest driver for economic competitiveness in the EU".  

On broadly similar lines, Willem Handels, pension strategy adviser at the Shell Pensions Fund, warned the Commission against focusing too much on cross-border issues. The substantial differences in norms across the EU would make it difficult to have pan-Europe systems, he said.

The deadline for official reactions to the Commission's policy paper on pensions is 16 November.