There was a largely positive reaction to the successful vote in the European Parliament on the Pension Funds Directive from industry groups, with most observers welcoming the decision (page 9).
Alan Pickering, the chairman of the European Federation for Retirement Provision, says: “At long last we are in sight of providing Europe’s citizens with the opportunity to use pan-European pension funds to save for their retirement. Hopefully, member states will see this framework as a platform upon which they can all build rather than a straitjacket within which we must all operate.”
The EFRP says that each member state must deal with those key aspects of pension fund operation that not only fall outside the scope of the directive but also, effectively, outside the powers of the EU.
The European insurance body the Comité Européen des Assurances also backs the move: “The adoption of the directive will also represent a milestone in the full integration of the single market for financial services as set out by the Financial Services Action Plan. Now the position that CEA has advocated throughout the procedure has very largely been taken into account - this is a great success for the European insurance industry.”
Leonardo Sforza, the head of EU affairs at pension consultancy firm Hewitt Associates, says that last-minute amendments to the directive do not change in substance the draft of the common position and that it was very likely to be adopted. “The key issue now is how member states will implement it,” he says.
There was one discordant note sounded by the Fédération Européenne des Fonds et Sociétés d’Investissement, or FEFSI. It says that the political agreement that was reached at the parliament ignored amendments adopted by the Parliament’s Economic and Monetary Affairs Committee covering nationally and supervised institutions that offer funded occupational schemes. “Consequently the directive will only cover pension funds and life-insurance companies and no other occupational pension schemes providers.”
“The consequence of this restriction will be to limit the choice of occupational pension schemes and make the structure of the occupational pension market less competitive,” it says. The directive would “have a limited impact on the extent to which employees in Europe, especially among small and medium-sized companies, will benefit from second-pillar pension coverage in the future”.