EUROPE - The European Union should not be seen as the "bad cop" of pensions, bullying member states into reforming their systems, according to László Andor, EU commissioner responsible for Employment, Social Affairs and Inclusion.

Speaking at the Handelsblatt Conference on occupational pension plan management in Berlin, the commissioner took pains to emphasise the working relationship between Brussels and EU member states.

"Member states that fail to get their pension systems into order will come under serious pressure," he warned. "But it would be wrong to see the EU as the 'bad cop', keen on ensuring that tough pension reforms are conducted by reluctant member states.

"I would stress the positive and constructive partnership we are building between European and national authorities."

In a speech notable for the absence of any mention of the increasingly contentious issue of Solvency II, Andor focused instead on the importance of good governance and active ageing.

"Without opportunities for active ageing, pension reforms that raise the retirement age will fail," he said.

Pension funds can help achieve this goal, he said, by allowing older people to combine earned income and a pension, by making sure that working longer "is not penalised" and by helping to adapt working conditions instead of paying invalidity benefit.

He pointed to a number of measures that relied on "soft" power - as opposed to legislation - to encourage best practice on optimising tax and other incentives for supplementary pension savings, as well as pay-out phase design, risk-sharing and mitigation and cost-effectiveness.

Andor largely sidestepped the topic of the revised directive on Institutions for Occupation Retirement Provision, but he did emphasise that there would a thorough impact assessment on the "business and social impact" of the legislation.

"We want occupational pensions to be safer, but we certainly don't want to throw the baby out with the bathwater," he said. "I can assure you the Commission as a whole will be very attentive to these issues."

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