31 January 2003

EP’s Karas says Pensions Directive unacceptable in current form

Othmar Karas, the European Parliament’s pensions rapporteur, has declared in a draft recommendation prepared for the European Parliament’s second reading of the Pensions Funds Directive that the European Commission’s common position on the Directive “cannot yet be accepted in its present version”, adding that the social security of beneficiaries should be taken into account. Karas has said that the Parliament is glad that parts of its proposed changes have been incorporated into the common position, which was communicated to the Parliament in November 2002.

Acknowledging that the present draft Directive is an “important step” towards promoting employee mobility, Karas believes that, “Further regulatory measures are, however, needed to ensure the problem-free transferability of entitlements.” According to him, “It needs to be stressed that we are dealing with a financial services directive that is meant to be a key step towards the completion of the internal market… However, it also deals with the second pillar of the pension system. This being so, it should not only create a framework for the capital market but also take into account the social security of the beneficiaries.”

Karas has noted that it is “regrettable” that the Council of Ministers has taken two years to respond to the Commission’s proposal of October 2000 and agree on a common position. He declared that five amendments have been reinstated from the first reading:

They cover conceptual clarity (article 6) in the phrase ‘retirement benefits’.

The legal certainty and legal clarity (articles 5 and 9 (1)).

The social security (recitals and article 9) covering ‘biometric risks’ or optional cover disability.

The protection of beneficiaries (article 11).

The coordination committee (article 21).

The European Parliament’s Economic and Monetary Affairs Committee is due to vote on Karas’ report 17 February 2003.

Link to Karas’ Draft Recommendation for Second Reading

© European Parliament