By Adam Cadle
Britain will fight EU plans to apply Solvency II funding rules to pensions, pensions minister Steve Webb has announced.
The European Commission aims to improve the efficiency of occupational retirement provision across the EU to ensure better pension protection is provided by insurance firms.
The government questions the necessity of the commission’s plans, arguing that there are fundamental contrasts between insurance products and pensions while emphasising Britain has an already established level of comprehensive pension protection.
If Britain imposed Solvency II rules, all private sector companies offering DB schemes would be affected. As DB schemes represent £1,200bn of private pension assets in the UK, the ruling would damage both pensions and economic growth.
Commenting on the government’s opposition to the European Commission’s ruling, Pensions Minister Steve Webb said:
“There will be no compromise on Solvency II. It is unbelievable the commission is pressing ahead with these pointless proposals which would cost UK employers with final salary schemes hundreds of billions of pounds and lead to DB scheme closures.”
“While Brussels is fiddling, Britain is putting reforms in place to keep our pension system sustainable in the future. We need to work together across Europe to tackle the real pension challenges we all face.”