PensionsEurope: Hard Brexit could be costly for pensions

PensionsEurope: Hard Brexit could be costly for pensions

PensionsEurope has called on the EU and the UK to consider the impact of Brexit on the pensions sector before striking a final deal.

The European pension scheme group issued a position paper urging consideration at the end of March, shortly after the EU adopted guidelines on the framework for a future relationship with the UK.

According to the position paper, the outcome of the Brexit negotiations will have a significant impact on the pension sectors in the EU and in the UK in a number of areas, including individuals’ rights, economic costs, implementation of the IORP II Directive in the UK and cross-border arrangements.

PensionsEurope was keen to point out the drawbacks of a hard Brexit in its position paper. This could include increased costs for clearing derivatives transactions, the majority of which are cleared in London.

The paper said: “Pension funds would like to see Brexit negotiations concluded in a manner that provides stability, in economic terms and impact on investment markets. This is needed to allow pension schemes to invest in a manner that enables them to have confidence that they will be able to pay out the benefits to members of schemes.”

“In order to do this, it is important that the negotiations are concluded with an agreement. Such an agreement will provide stability to the economy and investment markets. It will be good for the benefits of the employees, the employers who sponsor pension schemes and for the investments made by those schemes.”

Jerry Moriarty, vice chair of PensionsEurope and chair of the PensionsEurope working group on Brexit, said: “The outcome of the Brexit negotiations will have a significant impact on the pension sectors in the EU and in the UK. I hope that the EU and the UK will reach final agreement in time, because if there is no deal agreed it is likely to have a negative impact on economic outlook which will then impact on the companies that sponsor pension schemes and put the funding of those schemes under pressure.”

“It would also generate uncertainty for EU citizens working in the UK regarding their own pension rights and social security rights and for UK citizens who work in other EU countries.”

Categories: European Pensions, News

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