EUROPE: It is desirable for employers to provide pension services across Europe, but the EU's proposed directive for European Pensions has a long way to go before cross-border activities take shape, according to a new survey of some of the biggest European corporate plan sponsors.
The research, conducted by Withold Galiant, head of international coordination for German chemical giant BASF group, surveyed 16 occupational schemes across Germany, The Netherlands, and the UK, and found that employers believed the move would mean that synergies in the investment side would be better addressed [and] also cross-border movements of employees could be managed simpler - but only once tax considerations had been addressed.
On scale of one (strongly agree) to five (strongly disagree), the survey also concluded the following points for the German and UK/Dutch samples respectively:
* Proposal for directive will encourage employers via a single IORP (Institution for Occupational Retirement Provision) - (3.0) (3.2).
* IORP must be able to choose custodians and investment managers freely within the EU - (1.2) (1.1). According to Galiant, most respondents believed that broader EU links will bring enhanced competition and the make the bungling of mandates much easier.
- Choosing custodians and investment managers freely within the EU will cut costs and improve returns - (2.2) (1.6).
- Employers welcome that proposals for the directive cover both DB and DC schemes (2.0) (1.8).
However, there was some contention over the directive's ability to balance security and affordability with responses ranging from 2.6 to 3.3.
*Participants included Aventis/Hechst, BASF, Bayer, Beiersdorf, BMW, IBM, Lufthansa, Siemens, Akzo Nobel, BP, Imperial Tobacco, KLM, Philips, Shell (UK), Shell (NL), and Unilever
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