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21 October 2016

Investment & Pensions Europe: Brexit could derail cross-border pensions, resurrect HBS, experts warn


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The UK’s vote to leave the European Union (EU) has complicated the pan-European pensions debate, delegates heard at a recent institutional-investment summit for Austria, Germany and Switzerland.


Panellists at the summit, organised by Barbara Bertolini in Vienna, suggested Brexit could derail the launch of cross-border schemes in future and spark the renegotiation of pensions-related legislation.

Hansjörg Müllerleile, director of pensions at Germany’s Bosch Group, said: “If we have to renegotiate the whole IORP Directive in six years’ time at the latest, providers probably won’t set up any major cross-border pension plans today.”

He said he feared that, once the British “counterweight” against France and Southern Europe had left the EU, negotiations would return very quickly to the “full harmonisation” of pension systems.

He pointed out that this had been one the major issues in the IORP II negotiations against which Germany had fought.

Andreas Hilka, board member responsible for asset management at the Hoechst Pensionskasse, said he was also “worried”, as the British would no longer be there to “support the fight against the holistic balance sheet (HBS) model” post-Brexit.

“In the short term, I do not see a Renaissance of the HBS, but it will remain a permanent struggle,” he said. “All we have won is a little time.”

Alexander Graf Lambsdorff, German MEP and vice-president at the European Parliament, agreed that Germany would “lose an ally” in the EU, while Christian Böhm from Austrian Pensionskasse APK suggested that the British had helped prevent regulation from “going overboard”. 

“I wouldn’t want to imagine what the IORP II Directive would have looked like without the British,” he said.

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