Conflicts over MFR axe ‘overstated' says law firm
UK/EU - Regulatory conflicts between the EU and the UK over pension funding requirements are being overstated, law firm Denton Wilde Sapte claims.
Industry commentators fear key proposals in the UK’s Green Paper will be annulled by Europe’s upcoming Pensions Directive.
They point out that the European parliament has made it clear that it wants a stringent funding requirement – similar to the solvency rules that govern insurance companies.
But Denton Wilde Sapte solicitor Martin McFall says the MFR may not be the battleground that some claim.
He explained that an amendment to Article 16 of the proposed Pensions Directive provides for the technical provisions to be funded in accordance with that applicable in each member state.
“This softening of the original requirement for full funding at all times was introduced because of fears that it would result in disproportionately high costs and would limit the extent to which the directive opened up markets.
“Far from running counter to the directive, the Green Paper follows sympathetic concerns for putting in place a strategy for schemes to tackle the funding of pension commitments, while correcting any deficits through a ‘statement of funding principles’ agreed between employer, trustee and actuary.”
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