EUROPE - If the politics of implementing the EU pensions directives lag across Europe, so too does the enthusiasm of employers.
Delegates at the recent NAPF/EFRP Conference in Barcelona heard that 53% of 18 multinationals surveyed by German chemicals giant BASF AG said that they were not reviewing the possibility of establishing a pan-European pension fund.
As BP head of pensions Bruce Garner highlighted, most employees will only work in one country and therefore “supranational plans have little or no relevance to BP.”
So where do the incentives lie? Not in administrative savings it seems, with the median score of 3.3 in the BASF survey, where a score of five is strongly disagree and one strongly agree. This is despite estimates of e40m that corporations could save in administration costs by having a single jurisdiction.
One thing is for sure: when asked whether the directive will only be a success if the tax barriers are removed, the overwhelming answer was yes, with a median score of 1.53. An albatross around the directive’s neck, the tax issue remains unresolved and likely to result in a long delay to full implementation.
But some argue that it is not the tax hurdle inhibiting implementation of the directive, instead it is the insular attitude of local pensions regulators.
“Most regulators to be blunt don’t want to be bothered with foreigners,” said Robin Ellison, head of strategic development pensions at Pinsents.
“They will be required by the directive to accept foreign pension fund registration and revise their systems to develop a service that is acceptable across the EU.”
Rather worryingly, respondents to the BASF survey were none too optimistic on the potential for greater custodial and investment harmonisation under the directive, delivering a median score of 2.53.
The indifference of these respondents is alarming in that this is one of the core objectives of the directive. “Either multinationals have already found a way to exploit [these] synergies, or the directive has failed to deliver on its core area,” commented Withold Galinat, head of international benefits coordination department at BASF AG.
PwC, KPMG, EY and Deloitte must break up their consultancy and audit businesses into distinct firms to provide greater focus on the "most challenging and objective audits", the competition watchdog has said.
The Department for Work and Pensions (DWP) has released its first batch of guidance setting out how the guaranteed minimum pension (GMP) conversion legislation may be used to resolve unequal payments.
This week's top stories include the government spending £800,000 on a Gogglebox advert and MPs writing to The Pensions Regulator about its engagement with the Railways Pension Scheme.