EU/UK - Proposed amendments to an EU pensions directive pose a significant threat to UK occupational pension schemes, according to the EEF (Engineering Employers Federation).
Some 24 amendments to the draft directive on ‘Institutions for Occupational Retirement Provision’ (IORP), which aims to promote cross-border supplementary schemes, were approved by MEPs on the European Parliament’s Economics and Monetary Affairs Committee in a vote yesterday (Thursday).
These include the creation of a new committee to oversee the implementation of the directive, a five-year transitional period for countries who do not yet employ the prudent person principle, and a compromise on lump sum retirement pay-outs. According to the EEF, the amendments to the draft directive could adversely affect occupational pension arrangements in the UK and other EU member states by increasing employer costs, introducing greater restrictions for employers and employees, and reducing the chances that employers, especially SMEs, will offer schemes.
EEF deputy director of employment policy, David Yeandle, said: “Despite some of the most damaging amendments being dropped, the vote today presents a further significant threat to UK occupational pension schemes which are already under great strain.
“ It is now essential that the full Parliament supports the Council common position when it is discussed next month.”
The European Parliament is to vote on the directive in March.
Last year the EEF, along with the National Association of Pension Funds (NAPF), the Confederation of British Industry (CBI) sent a joint letter to 87 MEPs urging them to ratify the directive.
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