Changing times
Written by Laura Blows
February 2013
Laura Blows speaks to Joanne Segars about her new role as chair of PensionsEurope (formerly EFRP)
You have been chair of PensionsEurope for a few months now. How have you been finding the new role?
I’ve been finding it very enjoyable and I have great support from my fellow board members and the team at PensionsEurope, led by Matti Leppälä, so I don’t think there have been any surprises so far and I hope it stays that way. At least no nasty surprises. There are lots of challenges, lots for us to do, but it’s been good so far.
Will you be carrying on the work of Patrick (Burke, the previous head of PensionsEurope) or will you be looking for a change of direction?
I think Patrick has done a great job with making sure the organisation is seen to represent all forms of workplace pensions across Europe. There are particular challenges there, especially in the current economic environment, but we need to make sure that we can really represent, and be seen to represent, all forms of workplace pensions across Europe.
You mention the challenges in this current economic environment. What is of particular concern?
We have issues across Europe to do with the way governments have reacted to the financial crisis and the way in which pensions are being brought into that. So in the UK for example there is quantitative easing, which isn’t directly aimed at pension funds but nonetheless have an impact. Also, the tax changes in the last autumn statement, they have been one way in which the UK government has reacted. It has been the same across Europe. So, in Ireland there is a tax on assets, there have been some tax changes to the amount that can be taken tax free from a pension. There have been changes in the Netherlands as well, and in Hungary there has been effective nationalisation of funded pension provision. So there really has been some quite significant ways in which pensions have been affected through the financial crisis.
You mentioned that the aim of PensionsEurope is to represent all types of workplace pension provision. Are there any difficulties in this aim?
Well EFRP, PensionsEurope as it is now, has always spoken for workplace pensions. The CEEC countries in particular have got DC pensions and across Europe DC provision is increasing. There is still a very large and significant lump of DB provision and significant assets there but we need to make sure that we can take account of everybody’s views and needs.
What topics and issues will PensionsEurope be focusing on during your time?
We do have to be very clear and very focused as there is a vast number of issues and only limited resources. The IORP Directive is clearly one of the biggest issues in pensions across Europe and therefore affecting PensionsEurope. That will be a very significant issue, particularly looking at the solvency aspects of that review, and we’ve made it very clear that we don’t think that the holistic balance sheet is the right way forward. I’m convinced of the need for a review of the solvency aspect of the directive. There are other aspects of the directive review where we think the commissioner could do some very useful work, for instance regarding governance and communications. Elsewhere, you have the financial transaction tax, big issues around OTC derivatives and the ongoing financial crisis affecting workplace pensions and pensioners across Europe.
How does PensionsEurope help with these issues?
PensionsEurope has a very good reputation within the European Commission, within the European stakeholder group. I think we are able to speak on behalf of millions of pensioners, billions of euros worth of assets across Europe and that means that our voice carries weight. PensionsEurope is a respected voice and a voice that people listen to. So we are bringing together those different experiences, the weight of our lobbying power is how we expect to do that.
Longer term, what do you think will be your biggest challenges in this role?
The biggest policy challenge will be tackling the IORP review. I think we will have a challenge to make sure that we are seen as a vibrant organisation and one that is inclusive of all pension provision across Europe. That’s a good challenge to have as it means we need to keep refreshing. That’s part of the reason for the change of name, it’s not just about semantics, it’s about saying that we are about workplace pensions across Europe, and that we are an inclusive and outwardly focused organisation.
What was the driver for the name change? Why now?
We wanted a name that was perhaps more relevant, more modern than the European Federation of Retirement Provision. And one that was more inclusive, it’s more easily understood, PensionsEurope, I guess. And it trips off the tongue more easily too.
Along with the name change, how else would you like to see PensionsEurope develop?
I think there are lots of opportunities for PensionsEurope to constructively help direct the way in which pensions across Europe are provided. There are approximately 60 million Europeans that do not have any pension provision that comes with their job. So it is significant to see how they can be provided for in the future. I think there are some really useful ways in which PensionsEurope can share best practice across pension provision in Europe.
You say there are 60 million people without any access to a workplace pension at all. How do you see that being tackled? Auto-enrolment beginning in the UK for example?
I think governments across Europe are looking to see what the experience of auto-enrolment will be but many may think that it is not something for them at this time in the economic cycle. There is recognition that workplace pensions will need to play a bigger role. I think there is a need for shared best practice and auto-enrolment is one route. In the Netherlands coverage levels are at 80-90 per cent through collective bargaining arrangements. So there are lots of different routes through and the route through will depend on different social labour laws of that country. One thing PensionsEurope can do is point to best practice.
What do you wish to achieve during your time as chair of PensionsEurope?
One thing that I would like to look back on is to say that we got a good result on the IORP Directive and that actually workplace pensions are stronger as a result of our lobbying. To say that workplace pensions have survived and weathered the economic storm. I think that PensionsEurope would be in a very strong place, that we will have attracted more members, have an even stronger base of support than we do, giving us an ever stronger voice.
