When the ECOFIN council of European finance ministers rejected the European Federation of Retirement Provision’s (EFRP’s) ’EIORP’ (European Institution for Occupational Retirement Provision) pan-European pensions vehicle in October, the sighs from the EFRP’s Brussels headquarters were audible around Europe.
Here was a vehicle that appeared to fit all the necessary criteria for equality and transparency in cross-border retirement provision being offered to Europe’s finance ministers as a practical solution to the impasse on the pan-European pensions debate.
But, for reasons known only to those finance ministers involved, agreement could not be reached for its support. It seemed the pan-European pensions movement had suffered a serious setback. It was time to lament the passing of the EIORP as another failed prototype.
The concept, however, was down but not out. Indeed, the EFRP is pressing ahead with the EIORP proposal in a bid to lay down practical evidence that it could work.
In an interview with IPE, Alan Pickering, the new chairman of the EFRP, says the association has set up a working party with representatives from the UK, Netherlands and Ireland – chosen for their similar pensions systems - to launch a pilot project for pan-European pension funds.
Pickering,says the working party will be talking to the appropriate people in each of the three countries about their regulatory superstructures, but notes that before the discussion gets into too much detail, the EFRP wants to use a real employer as a pilot for the EIORP concept.
“If there are companies in those three countries who would like to work with us in establishing this arrangement then we would be more than happy to hear from them,” he says.
Pickering expresses the disappointed the EFRP felt when the EIORP proposal didn’t pass the ECOFIN meeting in October: “We worked hard with the Commission and made a presentation to the appropriate council working group where we demonstrated to them that our proposal did establish tax fairness.”
Piqued by the ECOFIN rebuttal, the EFRP chairman goes on to decry the lack of progress being made on the pan-European pensions directive by the council, claiming that the problem may be political rather than practical: “One has to think to what extent this really is a tax issue and what extent it is people still wanting to defend their system.”
He adds: “I think that EIORP proposal should have been music to the ears of the national tax authorities, because we tried to make sure there was fair tax treatment between the countries where the benefit was accumulated and the country where the benefit was eventually paid.”
The only solution remaining, Pickering believes, is to set up a practical example of how the EIORP would work. Pickering says discussions will start soon with the authorities about any real obstacles that they see to achieving this.
“My vision is of a relatively large company by Irish standards, with operations in other European companies like sales and servicing. I think the EIORP would be manna from heaven for a company that does not want to have a professional pension function in each of those countries nor wants its employees to worry about moving between any of those countries. “
A successful pilot project, Pickering says, would demonstrate that the pan-European pensions endeavour was not just a group of “ivory tower” pensions people trying to find a solution, but a real company.
“We may then discover that the real issue has nothing to do with technicalities but with a broader, cultural suspicion of what we are trying to achieve.”
Significantly, the EFRP is not the only organisation batting for the EIORP proposal.
Pickering says the association has the support of the European Commission in any action taken. Another lifeline could also be thrown by the European Parliament, which is set to discuss the tax neutral EIORP framework with a view to seeing if it can be amended to become a European ‘statute’ for pensions – similar to that used by European companies operating across borders.
Ieke van den Burg – the Dutch socialist MEP and rapporteur for the European parliament on taxation for occupational pensions – says that amendments to her report, voted on in early November by the EMAC committee, included an addition to the EIORP concept that was rejected by the ECOFIN council at a summit in Luxembourg in October.
She comments: “One of the amendments of the Parliament’s Employment & Social Affairs Committee concerned the situation of frontier and mobile workers.
“ The amendment concerned a link to a European ‘statute’ for pensions.
“This could be an addition to the idea of the EFRP for a pan-European pension fund (EIORP).”
Van den Burg adds that the inclusion of the EIORP principle in her report did not have a high level of support from the European Parliament’s EMAC committee, but says that has not affected her enthusiasm for the project: “We only won this with one vote. I hope we will win it in the plenary because I think it is an idea that is worthwhile elaborating.”
She adds that she would also like to see the proposed addition included. “The EFRP only wants to have the possibility to operate in different member states from one fund, but you could go further and establish a European statute with European rules for such a fund.”
The Dutch MEP says the statute would mirror existing European company statutes: “This is a method to
prevent companies and by rights their pension funds that want to be
established in every member state having to operate according to the rules of that member state. There is a sort of supranational legislation, which will cover their activities in the different member states. That might be an idea to build on further.”

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