UK - Europe must strike the right balance between enhancing financial stability and promoting investment providing the economic growth the continent needs and improving returns to investors, the financial secretary to the Treasury, Mark Hoban, has said.

According to Hoban, regulations in the financial markets - such as measures on central clearing of derivatives and MiFID - are necessary, but they have to be well negotiated to avoid important costs for pension funds.

As for the new European Insurance and Occupational Pensions Authority (EIOPA), Hoban opposed any new transfer of powers from the UK government to EIOPA or the European Commission over regulation or supervision of funded pension schemes.

"We are keen to work with EIOPA as it develops and ensure it delivers higher and consistent standards of supervision across the EU and helps to foster a deeper, single European market.

"That it is the primary responsibility of member states to regulate retirement savings in a way that works best for our citizens.

"Pension schemes are vastly different across the EU member states, and the rules around member protection and solvency requirements need to reflect that fact."

In other news, the National Association of Pension Funds (NAPF) and the Confederation of British Industry (CBI) have welcomed the announcement made by the Pension Protection Fund (PPF) to cut its levy for the coming financial year.
 
Joanne Segars, chief executive at the NAPF, said: "Pension managers and finance directors will be pleased to see the levy has come down for the second year in a row.

"This helps give some respite from the heavy financial pressures of running a defined benefit (DB) scheme, especially when the economy is so weak."

She added: "The PPF's reformed levy creates a closer link between a scheme's risk and the levy it has to pay, and this is a step forward.

"The challenge for the PPF in the coming months will be to ensure all DB schemes understand the new levy system, not least because there will be some losers as well as winners."

Finally, Steve Webb, minister for pensions, stressed that the government would increase the basic pension the growth in earnings or consumer prices - whichever is higher.

It will also increase the pension by at least 2.5% if both earnings and prices are growing slowly.

According to Webb, this new policy will have pumped an extra £45bn into state pension spending by the middle of the next decade.

The minister for pensions also said he was working on several measures - including the production of a document on pension pots - that would be published later this year.

"Many people have lots of different pensions with lots of different employers or different pension companies," he said.

"Rather than people having lots of small 'stranded pots' they can't do too much with, I want to help people put those pension pots together to give - to use a technical term - 'big fat pots'."

Topics