Warning on impact of EU pension rules
The CBI will today throw more fuel on Britain's increasingly fiery relationship with Europe by launching a stinging attack on new EU pension regulations. The business group will say demands that firms make huge payments to close funding deficits could cost billions at the worst possible time for the UK economy.
And the CBI has criticised European law makers for "refusing to listen" despite repeated pleas from itself, pension funds and even unions.
A survey, by the CBI and consulting firm Towers Watson, found two-thirds of business leaders are concerned about the prospect of the EU enforcing high deficit payments over a shorter horizon. These will come in under new solvency rules being planned in Brussels to cover final salary pension schemes.
Covering firms employing 1.3 million people, the survey will show that the cost and uncertainty of managing defined benefit schemes are holding back businesses' activity and harming their ability to grow.
The cost of running a defined benefit scheme – even those closed to new members – remains a big concern to businesses. Close to three-quarters are worried about the level of funding, and firms fear that things will get worse, with over four-fifths concerned that market fluctuations could further harm funding levels.
Katja Hall, CBI Chief Policy Director, said: "Businesses remain committed to providing good quality pensions to help their workforce... But employers' big concern about defined benefit pensions is no longer just around rising contributions.
"What's completely unacceptable is Brussels' plan to impose further costs on firms operating defined benefit pensions at a time like this, when the protection in place has already proven itself during the economic crisis."
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