| Pan-European pension decision imminent |
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| The European Commission’s Pension Directive has gone before the European Parliament for its second reading and faces a crucial vote, which will determine the future of the pension industry in Ireland and beyond. |
However, there are fears that the directive, drawn up by the Spanish Government could yet falter and set the industry back a decade according to John Feely, chairman of the Brussels-based European Federation for Retirement Provision (EFRP). ‘Essentially you can go forward with the compromise tabled by the Spanish and you can go forward with political approval, or you can try and put in amendments and you risk the political approval disappearing and you then go back to square one and no-one wants that because square one could take another 10 years,’ he warned.
Feely believes the reason the directive could derail is the delicate balance between all the various interest groups. ‘What we haven’t got is a common approach to pensions across Europe,’ he said. ‘You go from the well developed, second-pillar pension systems such as Ireland, the UK, and the Netherlands, to other countries where second pillar pensions are non-existent,’ he added.
Despite the expected to-ing and fro-ing in the debate between opposing pension cultures in Europe, Feely is quietly optimistic that the outcome of the vote will prove a workable situation for all and he notes that this would leave Ireland expertly positioned to benefit from the subsequent growth in the sector. ‘I think we are well placed to capitalise on this opportunity because of the experience and the industry that we have based around pensions, consultancy, fund management, and administration in Ireland,’ he said. ‘We have a good, well-respected regulatory environment and a good pensions regulator. And we also have the IFSC and companies are well used to the prospect of doing business from Ireland but clearly there are other counties who would see it as an opportunity for them also so we must not be complacent,’ he added.
In October, Brendan Logue, manager in the financial services division of IDA Ireland told the Irish Association of Pension Funds (IAPF) Conference on Europe in Dublin that the provision of pan-European pensions from one centre is the ‘holy grail for the European financial services industry and we ignore the opportunity at our peril’. He added that if Ireland became the recognised centre for managing occupational pensions schemes, up to 6,000 skilled jobs could be created.
The asset value of European occupational pension schemes is believed to be worth approximately •3 trillion. |
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| Article appeared in the November 2002 issue.
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