This week the pensions minister, Steve Webb, has promised to stop potentially “catastrophic” European Union plans to impose funding rules to British occupational pensions.
As part of the proposals the European Insurance and Occupational Pensions Authority (EIOPA) have been looking at rules to assess the solvency of pension funds, which providers say would ramp up their costs as more funding would need to be injected.
One pension provider has previously estimated that the changes, known as Solvency II, could cost UK businesses up to £500 billion, with the additional costs ultimately being borne by individual savers, who would see less generous pensions.
The pensions minister has said that there would be “no compromise” over the proposals, which he believes could see many pension schemes being killed off.
Mr Webb has said that although the European Commission has extended its timetable on the issue, the prolonged uncertainty means that schemes are becoming increasingly unsure about how they should be investing.
He added: “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.
“We will not let up until we make the Commission see sense.”
Mr Webb went on to say: “We expect them to publish a comprehensive impact assessment to clearly expose the catastrophic effect these rules would have on British pension schemes. It is horrifying these plans have got so far without this.”
As an accountant, Steve Horton, specialises in offering financial planning advice, support and guidance.