The European Commission should create a single occupational pension market, the European Fund and Asset Management Association (EFAMA) says.
EFAMA says authorities could easily offer defined contribution (DC) pension schemes on a cross-border basis. It says this would reduce retirement saving costs by stimulating competition.
Mathias Bauer, president of EFAMA, says: “We therefore urge the European Commission to develop an appropriate regulatory framework that could support the creation of DC-type pension products, fully portable and mutually recognised within the European Union.”
Rachel Vahey, head of pensions development at Aegon, agrees with the concept but says defined benefit (DB) schemes would fail to work on a cross-border basis as they must reach full funding first.
She also says: “It might be the best way of doing it, it’s still the $64m question, how do you get past the tax issues before you get a fully cross border pension? That’s the flaw.”
She highlights a similar concept to cross-border pensions already exists in some global companies, which have local experts to oversee tax planning.
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