EUROPE - "Internecine strife" between asset managers and insurers is threatening the passage of the European pensions directive through the European Parliament, according to Alan Pickering, chairman of the European Federation for Retirement Provision (EFRP).
Pickering, in particular, laid blame at the doors of Austrian and German insurers.
The chairman of the EFRP made the revelations in session at the Global Pensions’ European pensions law roundtable, held in London in November.
The news comes as the UK’s National Association of Pension Funds, the CBI and the Engineering Employers Federation have written to the UK’s 87 MEPs pressing them for a positive vote on the directive.
Pickering accused the insurers of greed in pressing for control over managing pension assets in the accumulation phase, to the exclusion of asset managers.
“If that greed leads to the demise of the pensions directive then European pensions modernisation will be delayed with disastrous consequences.
“I would argue the market is big enough for traditional insurers and asset managers,” added Pickering.
He acknowledged that at the payout stage insurers enjoyed advantages over asset managers in offering annuities to provide an income stream.
The European Federation of National Insurance Associations is pushing for the requirement to provide a lifelong income in retirement as a prerequisite to collecting pension contributions.
Pickering blamed German and Austrian insurers for backing this stance. But, he said, the irony was that a number of large German insurers have asset management arms within their groups.
One such German insurance group is Allianz. A spokesman for Allianz felt discussion about who stood most to benefit was not helpful.
“There are discussions between insurance companies and asset managers, between the ECOFIN council, the European Parliament and the Commission,” said Christoph John.
“There are a lot of different perspectives in this field, which is why it took so long to come forward with a directive.”
But, he suggested that a liberal approach to investments ran counter to the need to provide security for beneficiaries.
“We advocate there are clear elements that define a pension in every country throughout Europe. A pension is a lifelong income stream.
“It makes no sense to create a single market that doesn’t refer to this definition otherwise you will create distortions, you will create insecurities for beneficiaries. Some asset managers disagree. They come out of an Anglo-Saxon tradition with a more liberal approach. They want as few regulations as possible.”
However, Sheila Nicholl, deputy chief executive of the Investment Management Association in the UK, played down the dispute: “I’d be careful about describing it as a dispute. It is recognition of investment funds for pension purposes that we are looking for.”
The European Association for Investment Funds (FEFSI) is currently looking into the possibility of an amendment to the directive to include a specific reference to investment funds.
If the Association decides to proceed it will need to get the backing of an MEP for the amendment in the European Parliament.
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