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Pensions debate needs French role, says Pickering

UK - The French had a significant part to play in the development of pensions Europe, Alan Pickering, chairman of the European Federation of Retirement Provision, said in London last night.

“France has an important role in acting as a bridge between the different systems in Europe,” he said when speaking to a conference of the Association of Investment Sales and Marketing Executives. He pointed to the strengths of the French finance industry in wanting to maintain the balance between insurance, banks and asset management in delivering longer term provision. They want to use their traditional business approach, he added.

Pickering also pointed to another strength of the French approach, which was the country’s high savings ratio, particularly when compared to that of other countries.
Pension systems needed to be inclusive, he believed, rejecting the concept that state systems should be only for the poorer members of society. A universal state system helped develop social cohesion within Europe. But there was no model pension system for Europe, nor was this necessary, in his view.

In looking for change in Europe, there was no place for an investment industry driven solution, Pickering maintained. “We will and must work with politicians.” It was essential to be part of the solution and not to be the part of the problem.
Michael Haag, secretary general of the European Asset Management Association, said that the European pensions directive had become blocked in the Council of Ministers. “This is an election year in some EU member states and pensions are a politically sensitive subject.”

Referring to the increasing concerns of pension fund asset managers about legislation on funding requirement and accountancy changes, he said “Their concern is twofold: Firstly, that the changes will hinder the development or even survival of the traditional UK-type defined benefits scheme where the employer bears the investment risk. Secondly, the changes will constrain the investment scope of the pensions fund in ways that make it a less rewarding client. I think the asset management industry needs to be clear what aspects of these changes it wishes to criticise.”
On the issue of obstacles to cross-border marketing , Haag said taxation was a major probable for pension fund membership and marketing of Ucits funds across national boundaries. Whatever was the best way forward, he felt it would be a long time before much progress was made.
While there were acknowledged regulatory problems in marketing asset management, as with marketing to KAGs in Germany, or with feeder funds on a Europe-wide basis, he said: “I am not aware of any other major regulatory obstacles to cross border marketing of asset management in Europe.” He said he would be interested to hear of any specific obstacles.

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