The new European Directive on pensions currently going through the motions before being adopted by E...
The new European Directive on pensions currently going through the motions before being adopted by EU member states will remain impotent unless the necessary bilateral tax agreements are implemented that can make the provisions of the directive enforceable.
That is the view of actuarial firm Mercers, which this week got involved in a legal case that is expected to end up in the European Court of Justice.
Paul Kelly, speaking for Mercers, says the case is necessary to establish the legal precedence needed to ensure that this and other directives do not flounder on the issue of taxes.
"For directives to work it requires bilateral tax agreements between states," he says.
"The point of the Pan-European Pension Group, Pepgo, which is bringing the case, is to force adherence to the 'first principles' of the EU, to get the tax breaks on pensions.
The legal case in questions will involve software firm AMS Management Systems applying to the Inland Revenue for approval to put a UK based employee into a Dutch based pensions scheme.
The Revenue is expected to deny approval, which would lead to the case ending up in the European Courts.
Kelly says that AMS, Pepgo, and Mercers are all confident they will win the case, which would force European governments to ensure that tax systems do not impede the implementation of the Pensions Directive.
A successful directive is likely to open up the EU market to more cross-border competition between product providers and offer consumers in the UK access to euro based pensions.
Set up Vanguard in 1975
‘In the know’
Owen to pay £3m
Lasting power of attorney
Three risk profiles