EUROPE - Europe must allow for greater involvement of social partners in pension reforms and let funded, second-pillar pension systems that are extensions of the state welfare system stand separate from new regulations, the director of the European Association of Paritarian Institutions (AEIP) has warned.

Speaking as the organisation released its response to the European Commission's Green Paper on pensions, Francesco Briganti told IPE the European Union should in future consult with social partners before drafting further pension legislation, as well as allowing them greater involvement of management-level decisions.

"At management level, there are already some companies where the social partners are involved," he said, arguing that the involvement of the social partners would ensure better security and more solidarity at scheme level.

Briganti also warned against the European Union undermining the place of social bargaining agreements, which had recently been affected by rulings in the European Court of Justice (ECJ).

In one instance, the ECJ ruled that German municipal authorities of a certain size must tender mandates for occupational pension provision, rather than choosing the existing supplementary pension schemes, known as Zusatzversorgungswerke.

Additionally, AEIP's director cautioned about the application of European pension rules to the retirement systems in new member states, saying that while these funded, second-pillar systems may well be seen as separate from the state, they were in fact only an extension of the country's social security system.

"If you enlarge the supervision to this part, in future, the European Union could enlarge supervision on all social security systems in Europe," Briganti said.

"The social security systems in Europe are under the competence of the state, so what we think is that it is a specific question about how to deal with the supervision of the funded part of some states."

Meanwhile, consultancy Aon Hewitt has said in its Green Paper submission that the introduction of no further legislation would be the best outcome for European pensions.

Leonardo Sforza, head of EU affairs and research at the company, said more transparent and predictable guidelines were needed, as well as making current rules more business-friendly.

"The introduction now of new statutory requirements is more likely to increase the cost for employers rather than expanding the availability of occupational pension arrangements for employees," he said.

Sforza also said there were still problems that undermined the development of a pan-European market for pensions and called for thorough due diligence to be conducted by all countries implementing the IORP directive.

"In parallel, the feasibility needs to be assessed of a pan-European optional pension regime, which responds to the needs of multinational companies operating in different countries and can be used in place of multiple national-specific regimes," he said.

The consultancy's submission also called for the creation of a consultative platform - to be staffed by occupational pension experts - that could be used as a sounding board for any future changes and developments in the market.

It also warned that stricter solvency guidelines would only increase the cost of pensions for sponsoring companies, without protecting members benefits in a way that was cost-effective.