ABI rains on parade for pan-Euro pension

ABI rains on parade for pan-Euro pension

A row appears to be brewing between the Association of British Insurers and Eiopa over whether a pan-European pension would be viable or not.

The ABI has responded to a consultation on the proposal started by the European body in July. It said Eiopa should not take a “one-size-fits-all” approach towards a pension proposition.

The ABI added: “Radical pension reforms [introduced in Britain in April] demonstrate how consumer expectation can vary between member states and, if they are not able to benefit from the full pension features available for local products, they are unlikely to consider that their interests are being met or that they are being treated fairly.

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“One member state’s pension regime is not designed to be compatible with the tax laws of other member states. For example, not all member states have, or will maintain, a system of deferred taxation.

“For this reason, the creation of any standardised pension, be it a personal pension, occupational pension, trust or contract based, or through a second regime, could not exist within Europe without the harmonisation of taxation.”

Adviser view

Dan Clayden, director of Devon-based Clayden Associates, said: “There are a few issues that spring to mind straight away. For a start, you would assume that it would be denominated in Euros, which could create some exchange rate risk and costs.”