“Europe” is not considering extending the Solvency II rules for the insurance industry to pension funds in a way that would force the closure of final salary pension schemes.

Articles (14 Feb) in the Daily Express, the Daily Telegraph and the Independent paint an incomplete and sometimes misleading picture

There is a current review of the rules applying to pension funds. But the Commission will not put forward proposals for some months yet.

Those proposals will definitely not “cut and paste” Solvency II provisions into pension rules. They will be based on detailed impact assessments and will be designed to make pensions safer – so that people do not contribute for many years and then lose out – without undermining the supply of occupational pension provision.

Internal Market Commissioner Michel Barnier has made a comprehensive public statement (10 Feb) on these issues, regrettably not referred to in any of the articles. It is available on his website.

The proposals will of course only take effect if agreed by a majority of MEPs and a “qualified” (i.e very large) majority of Member States. The UK has never in EU history been outvoted on an item of financial regulation.

Mark English
European Commission London Office

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