EUROPE - The European Commission is considering an EU-wide safety net for pension schemes similar to the UK's Pension Protection Fund (PPF).
In a Green Paper published yesterday, the Commission highlighted a need for guaranteeing pension benefits across all EU countries for both defined benefit and defined contribution funds.
It said: "Reflecting developments in banking, insurance and investment, there is a need for promoting pension benefit guarantee systems in the member states, possibly co-ordinated or facilitated at EU level."
"Such systems can not only address failures in sponsor-backed defined benefit schemes or book reserve schemes, but could also compensate for excessive losses in defined contribution schemes.
"There are, however, important aspects to address such as moral hazard and potential implicit public support in very turbulent times."
The Green Paper also confirmed it favours the adoption of an adjusted version of Solvency II - the standard which will be required of insurers from 2012 - for pension schemes across the EU (GP Online, yesterday).
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