EUROPE - Mercer Human Resource Consulting has criticised recent steps towards cross-border pensions as largely ineffective.
Last week France dropped its objection to proposals, removing the last significant obstacle in the way of reform. But according to Mercer the measures are unlikely to benefit Member States until greater tax harmonisation is brought in.
Mark Sullivan, European partner at Mercer said: The benefits of this new regulatory framework are mainly academic. Multinationals will simply not bother with the hassle of extra regulation for very little gain.”
He added that multinationals can already achieve savings by centralising the management of their individual country pension plans, with many already gaining from the economies of cross-border investment management.
“From a financial perspective, the potential benefit that European legislation could deliver is tax harmonisation, but this is not addressed by the current initiatives. Neither is there the appetite amongst member states to tackle the issues that need to be resolved to achieve this. Sullivan argued that a legal case brought before the European Court was the quickest and most effective solution to achieve this.
By Madhu Kalia
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