Plan for EU-wide pension schemes to avert 'time-bomb'
A new EU plan will allow employees of multi-national corporations to avail of pension schemes in various member states.
The proposals are aimed at making it easier for pensions to operate on a cross-border basis as concern grows of an EU-wide "pension time-bomb". Workers who travel for work purposes will be given the opportunity to contribute to schemes in various different countries.
The plan, which could be in place in 2016, is being developed as part of the new EU workplace pensions directive.
Dublin MEP Brian Hayes, who is the European Parliament's lead negotiator behind the directive, warned that a pensions crisis is "on the horizon", particularly in Ireland.
Mr Hayes told the Pensions Europe annual conference in Brussels yesterday that over 70pc of Irish people are not part of a workplace pension scheme, and will therefore depend on a State pension when they retire.
"There is a pension time-bomb on the horizon in Ireland. Today there are five workers for every pensioner but if the current demographic trend continues, by 2060 there will be two workers for every pensioner," Mr Hayes said.
"My intention with this directive is to encourage more employees across the EU to take up workplace pensions and, at the same time, make it easier for employers to set up workplace pension schemes. This file will be co-decided between the European Parliament and the European Council and I am committed to getting this legislation adopted by early 2016," Mr Hayes added.
The Fine Gael politician called on the EU authorities to play a greater role in preventing a pensions crisis in the future.
"In Ireland, we cannot ignore the pension challenge which lies ahead. People cannot continue to rely primarily on state pensions. Governments and the EU institutions should be doing their bit to encourage citizens to supplement their state pension retirement with either workplace or private pensions."
Mr Hayes said the directive, which must be agreed by the European Council, will allow people working with multi-national firms to contribute to their schemes in different EU member states.
"As the EU workforce becomes more mobile, pension schemes need to be able to operate in a number of different member states.
The directive makes it easier for pensions to operate on a cross-border basis, therefore allowing people who work in big multinationals to be part of schemes in various different countries."