Unions spell out pensions code

Employees and trades unions must have a central voice in the implementation and management of supplementary pension schemes in Europe, according to a code of good drawn up by EURESA, the social economic group of European insurance companies, and ETUC, the European Trades Union Council.

The code, launched at a recent Brussels forum, seeks to ensure that second pillar schemes are also made both collective and compulsory.

Priority for prudential European investments with good, reliable returns balanced against socio-ethical criteria, is included on EURESA's agenda. And sexual equality and free transfer rights of pensions from one company to the next are also major tenets of the guidelines.

Thierry Jeantet, general director of Paris-based EURESA, which in-cludes Belgian group P&V, France's Macif, Denmark's LB Group, Sweden's Folksam, Germany's Huk-Coburg and Italy's Unipol, explains: As Italy, Sweden, France and Germany all begin to move towards second pillar pension funding, this charter has been designed, following ne-gotiation with DGV of the European commission, to ensure full em-ployee participation in the process. It is a positive step towards the clear definition of workers pension amounts and their involvement in how these are invest-ed, to put an end to some of the games pension funds have played in the past with vital retirement benefits."

Jeantet added that EURESA and ETUC were also entirely opposed to any abolition of present state social security retirement provisions.

Preference for joint employer/ em-ployee DB pensions arrangements with progressive evaluation and adjustment are also elucidated in the code, with the accent firmly placed on the employee as the 'owner' of the accumulated pension contributions.

Arnaud D'Yvoire, general secretary of France's pensions watchdog L'Observatoire de Retraites, believes such an approach has tremendous virtues. "I believe all three parties principally have the same interest of pensions liabilities at heart - so I see no work compatibility problem. However, I think the unions could influence greater risk aversion on the part of funds and safer, more ethical in-vestments. At the same time though, companies would be involving unions and em-ployees in the traditionally shunned capitalisation process.

Phillip Neyt, general manager of the Belgacom pension fund in Brussels, which has three trade union representatives on its ten strong pensions board, agrees that employee representation within the scheme is vital.

However, Euresa's investment recommendations are slightly flawed, because diverse equity investment is a core element which enables us to meet our pensions liabilities, and indeed when we have shown our asset liability studies to the unions here - they have understood the issues and withdrawn from traditional domestic bond preference arguments," he says.Hugh Wheelan"

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