| Author (Person) | Chapman, Peter |
|---|---|
| Series Title | European Voice |
| Series Details | Vol.10, No.20, 3.6.04 |
| Publication Date | 03/06/2004 |
| Content Type | News |
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By Peter Chapman Date: 03/06/04 EUROPEAN Union member states hoping to lure lucrative pan-European pension funds within their borders may need to scrap strict controls on the investments, an industry chief has warned. Jaap Maassen, board member of Dutch pension giant ABP, told European Voice that multinationals are gearing up to base their pension funds in countries with the most industry-friendly regimes when new rules enter into force in 2005. Under the law, multinational companies will be able to select a pension provider to operate a single pension fund for all employees, regardless of which country they work in. The directive states that pan-EU funds would only be governed by the rules and regulations pertaining to the country in which they are based - although certain social protection provisions from the workers' country would also apply. Pension providers' multinational customers "will look at whatever offers the best for their money - and the supervisory climate is going to be a point of consideration", said Maassen, adding that "pension funds may start shopping [for a location]". "You could have a situation where you say 'let's move to country X or Y because it has an underdeveloped supervisory climate that is advantageous to us'." He also insisted that countries wishing to attract pan-EU funds need to "strike a balance". At present, occupational pension providers operate for the most part only in the member state in which they are established. A firm which has a presence in all member states must therefore call on the services of 25 different providers. For a multinational, the European Commission says this could easily cost tens of millions of euro each year. A Commission pensions expert said the new rules could lead to an influx of pensions business into the UK, Ireland and the Netherlands, where national regulators have relatively few restrictions on the types of investments that pension funds can make. These could be quantitative limits on investments in certain assets such as real estate or derivatives - common in many member states, together with strict minimum annual returns. Instead, these countries have a so-called prudent person approach, which gives fund managers more scope to follow their own judgement, provided that they avoid reckless decisions when they invest policyholders' money. Countries attracting the most pan-EU pension funds will gain from tax revenues and extra jobs in the financial services sector, the expert added. According to Jaap Maassen, board member of Dutch pension giant ABP, multinational companies are getting ready to base their pension funds in Member States with the most industry-friendly regimes when new rules on pan-European pension funds enter into force in 2005. |
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| Source Link | Link to Main Source http://www.european-voice.com/ |
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| Subject Categories | Business and Industry, Employment and Social Affairs, Internal Markets |
