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Green light for pensions

Tuesday 13 July 2010 - by Daniel Sage


He said: “Pension funds did not need billions of euros of financial support to survive the financial crisis. Of course we need solvency rules for pension funds, but we don’t need Solvency II rules for pension funds. If we brought in Solvency II rules for pension funds, that would lead to lower pensions.”
Regulatory change alone is unlikely to be a cure-all and success will likely depend upon other factors too.

One such factor is whether governments and people begin to look at retirement differently. As Prof Barr says: “The purpose of retirement has changed – it no longer exists primarily to clear dead wood out of the labour force, but to provide a period of leisure in later life. Given this new purpose, it is bad economics, bad politics and bad social policy to force people to retire on a completely fixed date.”

Foundation for European Progressive Studies economic advisor Dr Mattheiu Meaulle goes further, arguing that pension reform goes beyond matters of regulation.

He says: “All pension plans are made on the assumption of a positive rate of growth, meaning we are counting on creating more wealth every year. Yet, we are producing less and less. These suggested plans will simply aggravate things.”



A consultation period will now run for four months until November, after which the Commission will “consider the best course for future action” based upon the outcome of the consultation. This could include a white paper or a series of separate initiatives based upon the issues raised by the green paper.


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