The concept of European pension schemes and establishing cross border supplementary pensions in Europe was welcomed by Franck Vandenbroucke, Belgian minister or social affairs and pensions. But he noted that this was “on condition that we keep in mind that supplementary pensions are not merely a financial product, only managed by means of free market mechanisms, but part of the organisation of social protection”.
He said he wanted to take the concept that “social justice lies within the exclusive competence of the member states” a step further. “It would be appropriate for the directive to help us where it comes to implementing our national, social legislation,” he said.
Vandenbroucke went to ask a number of questions in relation to how communications would work between an institution for occupational retirement provision as envisaged in the directive proposals, and an individual member. “How to ensure that the institution effectively answers questions from individuals. The language problem will most probably constitute a stumbling block, but also the differing judicial and social-economic framework can cause problems.”
And where there was provision for equal representation of employees and employers, how would this work in pension funds established under the law of another member state, he asked. “Under which law are the participant and the beneficiary to claim rights?” This sort of information has to be very clear so as to avoid misunderstandings, he said.
“One may wonder whether the basic assumption of the proposal for a directive on the activities of institutions for occupational provision, which considers social legislation to be subordinate to free services can be regarded as adequate so long as there is no co-ordination of social and labour law in these matters.”
He suggested an alternative approach could be “to provide a local fronting, with a possibility of outsourcing certain services at a European level. This enables multinationals to reach a scale benefit, allows the flows of money to be assembled ion one institution and gives fiscal transparency the chance to be realized, without harming the social and labour legislation and habits.”
Vandebroucke said that “in the second pensions pillar, we want to achieve sustainable social justice. In the years to come, the open method of co-ordination can back up this objective.” He added “open co-ordination is a creative method that allows us to concretely define a social Europe and to anchor that definition into European co-operation.”
Outgoing EFRP chairman Kees van Rees relinquished office with some pointed comments. The association needed to discuss and do something about retirement ages. The real issue was not about official retirement ages but effective retirement ages, he said.
He also suggested pensions were too important to be left up to politicians. “We need some kind of independent supervisor of the first pillar, into which perhaps the second pillar could be incorporated. This supervisor should be able to force member states to act when their finances got out of line – as otherwise it takes to long. This may sound like big brother, but it is too important to leave to politicians.”
Referring to the pensions legislation in Belgium, he said the model Vandebroucke was following was more occupational provision through industry wide schemes. “This was a very paritarian approach and the minister was talking about something he hasn’t really worked out- that of capital guarantees, returning premiums calculated at 3%. But has the minister forgotten, Belgium does have occupational pensions – they even have industry-wide plans! Why does he not strengthen those?” He added: “I think Mr Vandebrouucke’s plea for a new model is rather ideologically coloured.”
Turning to the directive, van Rees tackled the minister’s arguments against it. “He is saying that social policy and labour law cover in host members states should be complied with, but he has not established yet how this be tackled. In other words, he confuses the financial services character of the directive.”
The minister’s approach shows that he opposes the directive on the basis that it is a financial services measure. “But would rather like to use it as a leverage for the redesign of a pensions system at public level.” Van Rees was pessimistic about any progress on the pensions directive under the Belgian presidency and looked to the Spanish in 2002 to push matters further.

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