The European Commission (EC) has promised to review funding requirements for pension funds to fall into line with Solvency II (SII).
In a white paper on how to tackle major challenges facing pensions across Europe, the EC set out how European Union (EU) member states can deal with an ageing population which is living longer and having fewer children.
The National Association of Pension Funds (NAPF) and other bodies warned that forcing pension funds to hold far more capital than they currently do would "kill off" defined benefit (DB) schemes by increasing their cost to employers.
However, the EC has said the European Institution for Occupational Retirement Provision (EIORP) directive, which sets out the current funding requirements for pension funds, will be reviewed.
The white paper said: "The commission will, in 2012, present a legislative proposal to review the IORP directive.
"The aim of the review is to maintain a level playing field with SII and promote more cross-border activity in this field and to help improve overall pension provision in the EU.
"This will help address the challenges of demographic ageing and public debt."
The EC document promised to "enhance the safety of supplementary pension schemes, including through a revision of the directive and better information for consumers".
It also outlines a range of ways to help older people continue working, if they are able. And puts forward initiatives to ensure people who move to another country can keep their pension rights.
EU commissioner for employment, social affairs and inclusion László Andor, pictured, presented the white paper in Brussels this morning.
He said: "Ensuring adequate pensions for the future is possible if we follow through on our commitments to reform.
"The impact of ageing is upon us; the baby-boomers are retiring and fewer youngsters are entering the labour market. But it is not too late to meet these challenges."
He added raising retirement ages was important and many people were willing to keep working past pension age, if the conditions were right.
The EC said the measures at European level will "support and complement national pension reforms".
It proposes, in particular, to:
- Create better opportunities for older workers by calling on the social partners to adapt work place and labour market practices and by using the European Social Fund to bring older workers into work;
- Develop complementary private retirement schemes by encouraging social partners to develop such schemes and encouraging member states to optimise tax and other incentives;
- Enhance the safety of supplementary pension schemes, including through a revision of the directive on Institutions for Occupational Retirement Provision and better information for consumers;
- Make supplementary pensions compatible with mobility, through legislation protecting the pension rights of mobile workers and by promoting the establishment of pension tracking services across the EU. This can provide citizens with information about pension entitlements and projections of their income after retirement.
- Encourage member states to promote longer working lives, by linking retirement age with life expectancy, restricting access to early retirement and closing the pension gap between men and women.
- Continue to monitor the adequacy, sustainability and safety of pensions and support pension reforms in the member states.
ile pension systems are mainly down to member states to run, the EC said theEuropean Union can introduce legislation which affects the function of the internal market.
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