Brussels, 10/03/2000 (Agence Europe) - Stating its view on the European Commission's proposals on supplemental pensions, the European Parliament Committee on Economic and Monetary Affairs (chaired by Christa Randzio-Plath, PES, Germany) has called for opening of the market, the abolition of obstacles to worker mobility and the cessation of tax distortions that affect cross-border supplemental pension benefits. These recommendations match those set out in the European Commission's communication of last May (see EUROPE of 12 May 1999).
The draft resolution by rapporteur Wilfried Kuckelkorn (PES, Germany) was considerably amended by the Conservatives and Liberals. In the end, while considering that there is a need to guarantee the security of investments, the majority expressed the view that the Member States should no longer interfere in pension fund investment strategies. The long-term objective is the "creation of pan-European pension schemes". These could initially be introduced in multinationals and would later extend to industry and cross-industry systems, multi-employers and multi-employees, allowing cross-border affiliation, explains an amendment by Christopher Huhne (Liberal, UK).
The setting into place of a single market for supplemental pensions implies the elimination of inequalities in tax treatment at national level for different contributors, notes the EP committee. To abolish cases of dual taxation, it recommends taxation at the level of pension benefits, rather than on contributions (amendment by Christopher Huhne).
Draft directive establishing harmonised prudential rules expected this summer
Early this week, Commissioner Frits Bolkestein, responsible for financial services, confirmed that the European Commission would be proposing this summer a directive harmonising prudential rules for pension funds in the EU, with the objective of establishing the necessary prudential standards, liberalising management rules and establishing a framework for cooperation between national supervisory bodies. "In countries where fund managers are free to decide on asset allocation, pension funds performed twice as well as those with restrictive rules, without undermining security", he explained in a speech to the Royal Institute of International Affairs in London. "Between 1984 and 1998, Irish pension funds had on average a real return of 12.5%, whereas in Denmark, where there are stricter limits on equities, they reached only 6.15%."