EU/UK - MEPs have climbed down over changes to a draft EU pensions directive which threatened to scrap tax free lump sum retirement pay-outs in the UK.
The decision was welcomed by the UK’s EEF (Engineering Employers Federation) and NAPF (National Pension Funds Association), both of whom have been lobbying the European Parliament against other amendments which they claim could damage UK occupational pensions.
Commenting from Brussels, David Yeandle, EEF deputy director of employment policy, said: “This is very welcome news for all those involved in UK occupational pensions, which are already under strain, as the UK’s tax free lump sum payments seem to be no longer under threat from European law.”
A compromise package of amendments to the ‘Institutions for Occupational Retirement Provision’ directive was tabled yesterday by the European Parliament’s economic and monetary affairs committee.
But the entire directive is yet to be approved by the European Parliament next Tuesday before being finalised later this year. Implementation by member states is aimed for 2005.
Christine Farnish, NAPF chief executive, said: “However, we still have some concerns, especially over pension scheme funding measures.
“A lot now depends on how the government chooses to implement the directive.”
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Occupational pension provision has continued to grow in value, but there remains large variance in incomes across the pensioner age group, according to latest government data.
Defined benefit (DB) schemes could have an aggregate surplus by 2021 under Pension Protection Fund (PPF) projections, its strategic plan for 2018 to 2021 reveals.
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