EUROPE - The European parliament should adopt two separate directives on supplementary pensions – one for schemes which cover biometric risk and another for those which do not provide additional social cover, according to Wilfried Kuckelkorn, German member of the European Parliament and rapporteur for the European socialist party on the Commission’s draft proposals.

Speaking at a recent Brussels conference, Kuckelkorn commented: “I think having two directives would be a step forward to those that feel excluded from the Commission’s proposals.
“ In terms of tax advantages, I do not think that pension funds should get these if they do not cover biometric risk.”

The issue at stake, he said, was one of ensuring true European pensions parity.
“ If we don’t get the harmonisation then we won’t get cross-border pensions.”
Kuckelkorn said biometric risk was key to the implementation of European pension standards:
“ We have heard Dr Heubeck (Klaus Heubeck – professor at the University of Cologne) saying here today that we are fighting ghosts with this issue and that the cost of providing biometric risk would only amount to around 1% of returns per annum.”

Acknowledging the difficult debate ahead in the parliament, he added:
“I know there are those organisations which want a complete freedom of choice for consumers and say that small and medium enterprises could never finance taking on these risks.
“ However, there must be an element in pension funding where we are taking into account not just capital constitution but a coverage of essential social risk.”

He also took a sideswipe at what he felt was the financial agenda leading the supplementary pensions debate.
“ We are talking about billions of euros here and I believe that many of the arguments we are hearing here are accessories that hide the interests of parties in this room.”
The proposals are set be voted on by the parliament in spring 2001.

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