UK/EUROPE - Ruth Kelly, economic secretary to the Treasury, today told delegates at the National Association of Pension Funds' investment conference in Edinburgh that the UK government will not allow inappropriate EU regulation to threaten the UK's present pension system.
Kelly said: The supplementary pensions directive should be about delivering the mutual recognition necessary to remove barriers to the operation of occupational schemes on a cross-border basis. It is not, and must not become, an attempt to interfere with the structure of member states' pension systems.
Rhoslyn Roberts, the NAPF's spokesman on Europe, said that Europe is pushing for 100% fully funded pensions, which is more than the UK has at the moment.
Roberts said the directive could be an unhelpful for UK schemes if it introduced more regulation. She said there is suspicion in Europe of the UK's relatively unrestrictive 'prudent person' rule: Other European countries find it hard to operate without a lot of rules.
The original directive was meant to be implemented this year or next, but the Belgian and Swedish presidencies dithered on the issue. However, the Spanish presidency has put the directive at the top of its agenda and would like agreement on it by member states by June.
Some European countries do not even have funded pension systems and Roberts said the UK's fear is that it is these countries which are calling the shots and driving the agenda. The UK does not have the power of veto over the supplementary pensions directive, as it does on issues such as tax, and will have to live with it if passed.
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