EUROPE - PricewaterhouseCoopers (PwC) has warned UK companies to urgently take action on the EU cross-border pension directive if they haven't already done so, as the 29 March deadline looms.
Under the Pensions Act 2004, effective 30 December 2005, a DB pension scheme located in one EU member state needs to apply for authorisation and approval to accept contributions from employers which employ members in other member states.
The consequences vary from fines to trustees, to a requirement to fully fund UK pension deficits.
George Yeandle, partner at PwC said, “Companies must decide by 29 March 2006 whether to register their UK pension scheme with the Pension Regulator as a cross border scheme. For most companies, registration will potentially bring significant added cost such as accelerated funding of a pension deficit and further administrative burden.”
In a recent interview with Global Pensions, Peter Blake principal at Mercer Human Resource Consulting, said large multi-national pension schemes were frantically putting measures in place to avoid being burdened with a requirement for full funding under new cross-border regulations.
Blake claimed virtually all the MNs he was working with had chosen to avoid the full-funding requirement.
“I am positive we will make the deadline,” Blake said. “But we have been very busy to ensure we get there.”
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