LCP research has shown that the additional cash funding requirements imposed on UK companies could have been as much as half of GDP had the European Commission’s controversial IORP II directive come into force. The staggering figure of 46% of GDP sharply contrasts with the estimated cost to other European countries: for example, Germany and Ireland would both be hit by just 2% and Belgium by 1%.
The European Pensions Regulator (EIOPA) published the final results of its Quantitative Impact Study (QIS) into the financial implications of imposing insurance style regulation on private sector funded pension schemes in July. By analysing the results of the QIS, LCP has identified that the UK would have been - by far - the most impacted country by the pension proposals.
Jonathan Camfield, LCP partner, said: “Our research demonstrates that the impact of Europe’s pension proposals would have been gargantuan for the UK when compared to other countries. These proposals would be crippling for the UK economy.
“Whilst we are pleased that the European Commission has put these proposals on hold we are concerned that the ongoing work by various European bodies and the statements being made from Brussels, suggest that the issue remains firmly on the agenda, and is not going to go away quickly.
“Even if Europe does not require UK employers to recognise these additional costs at the moment, our research demonstrates the challenges faced by the UK private sector relative to its European counterparts. This begs the question whether the UK private sector can manage to pay off all its pension promises, whilst remaining competitive with other European countries over the coming decades.”
|
