All remaining defined benefit pension schemes in the UK will be forced to close and many businesses pushed into insolvency if European proposals to strengthen company retirement plans are put in place, influential employers’ and labour groups have warned.
In a letter to be sent to senior European commissioners, the heads of the National Association of Pension Funds, the CBI and the TUC labour union group warned that the plans will have disastrous consequences for companies and employees.
“By demanding dramatic increases in funding from employers, the Commission’s plans would – at best – force all remaining defined benefit schemes to close and – at worst – push many businesses into insolvency, leading to significant job losses,” they wrote.
This week, the European Commission is to receive recommendations from the European Insurance and Occupational Pensions Authority, the continent’s industry supervisor, on a directive that will force employers to move quickly to fill scheme shortfalls.
EIOPA is proposing to adapt for use in assessing pension schemes the so-called Solvency II regime, Europe’s biggest shake-up to date of insurance regulations due to take effect in 2014.
