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Stakeholder set to be Euro pension model

The EU could be set to introduce a portable pan-European stakeholder-style pension based on a report from a group of leading European financial services companies.

According to experts at the ABI, the report by the European Financial Services Roundtable may form the basis of a new pensions directive with a green paper to appear by spring 2003.

It could mean an IFA&#39s fact-find would have to consider whether a client is likely to move within Europe when recommending a pension.

The report, which lists Scottish Equitable pensions development director Stewart Ritchie as a contributor, says Europe&#39s pensions are “effectively quarantined” and sets out a framework for pension savings to remain tax-exempt. It proposes a portable pension with standardised terms and charging structures. It also calls for EU-wide solvency standards and governments to provide forecasts of state benefits.

The report says the effect of combining European pension funds could see returns increase by 10 per cent. An agreement on pan-European occupational pensions has already been reached by European leaders.

ABI head of European affairs Simon Gentry says: “We believe the proposed core standards set out in the report are sensible. Consumers should be able to choose a product that is purely national or a portable product that meets EU-wide standards.”

An EU spokesman says: “The report is a useful contribution to the debate and makes some useful points. It confirms the Commission&#39s idea that member states should remove obstacles to cross-border pensions.”

EFSR chairman Pehr Gyl-lenhammar, who is chairman of Aviva (formerly CGNU) says: “Europe&#39s politicians must create a single market in pensions that will increase consumer choice, reduce costs, encourage take-up and go some way to averting the pension disaster that Europe is facing.”

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