The UK government has said it will challenge all proposals in the IORP II Directive that do not “add value” to the local pension system, a minister has warned.
Economic secretary to HM Treasury, Andrea Leadsom, said the government fundamentally disagreed with the European Commission’s treatment of pensions as “insurance products”.
The Conservative MP, who joined the Treasury in April this year, said the government would challenge IORP II proposals with allies in the European Union that postponed solvency requirements for European pension funds.
However, speaking at the National Association of Pension Funds’ (NAPF) annual Europe seminar, the MP said details on how and which proposals to negotiate were still scarce.
“The [European Commission] has forged ahead with a legislative proposal that still represents problems for the UK,” she said. “It has made a poor case for strengthened rules around governance and transparency.
“The UK should not be obliged to change the way we regulate IORPs if we have a robust approach to regulation.
“If there is no clear case for changing the way UK occupational pension schemes meet high standards of governance and transparency, then we will oppose new prescriptive requirements.”
Solvency requirements were originally included in IORP II before being dropped by the Commission, after negotiations with member states opposed to the measures.
The UK, alongside Germany, the Netherlands, Ireland and Belgium, compelled the Commission’s to postpone solvency requirements in favour of a focus on governance and transparency, currently being debated.
However, the revised IORP II, since publication in March this year, has drawn much criticism for being overly prescriptive in terms of transparency, communications to members and governance – particularly in more developed pensions markets.
Leadsom denied suggestions her party’s plans to re-negotiate the UK’s relationship with Europe would undermine the government’s negotiating position – or the efforts of the NAPF and PensionsEurope.
Should the Conservative Party win next year’s general election, it has committed to holding an in/out referendum on the UK’s membership of the EU if re-negotiations take place.
Leadsom – also a member of the Conservative Party’s Fresh Start Group looking at re-designing the relationship – said that, where the government was focusing on policy, it would remain focused.
“There is no muddying of the waters,” she said.
“We are working towards reform of the EU to make it more competitive. But individual portfolios are absolutely focused on the engagement to the benefit of the EU and not just UK interests.
“I do not see the two things as incompatible. Those who are negotiating within the EU are very careful to avoid bringing issues of fundamental reform into discussions about day-to-day legislation.”
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