Latest updates from our European experts - Eversheds Sutherland

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European Pensions Agenda

Latest updates from our European experts Date: June 2014

Advisers: Eversheds LLP

1

EU – European Commission publishes proposed new IORP Directive – Under the Commission’s proposals, IORPs will be required to: • put in place effective risk management, internal audit and actuarial functions • be run by persons with adequate professional qualifications, knowledge and experience • provide detailed pension benefit statements to members, and appoint a depository to safeguard plan assets, where members and beneficiaries fully bear the investment risk.

Action: Lobby MEPs and national ministers if you want changes made to the Directive before it is approved by the Council of the EU and the European Parliament. Read more

2 France –Employers with DC plans must comply with new Social Security rules

by 30 June 2014 – Employers have until 30 June 2014 to benefit from social security exemptions on their contributions to DC plans. DC plans have to be aligned with these new requirements before this date.

Action: Where necessary, employers in France need to amend their DC plans to meet the new conditions by 30 June 2014 and communicate any changes to plan members.

3

Germany - Preventing employee who was 45 when she joined her employer from joining the company pension plan is unlawful age discrimination – The German Federal Labour Court recently ruled that an eligibility rule in a company pension plan that required an employee to have completed a ten year waiting period to join the plan by age 55 is unlawful age discrimination. Action: German employers should review the eligibility rules for their company

pension plan and amend any discriminatory provisions of this nature.

4 Ireland – High Court sets standards for trustee decision making – In Greene and

Others v Coady and Others the Irish High Court has set out what factors pension plan trustees should take into account when deciding whether to make a contribution demand against a sponsoring employer. It also clarified Irish law on conflicts of interest and wilful default and highlighted the importance of trustees following a proper process and obtaining relevant expert advice before making decisions.

Action: Trustees should review their decision-making process in light of this judgment, including procedures for dealing with conflicts and for documenting the factors considered and advice sought when making a decision. Read more

5 Belgium - Blue and white collar employees’ pension benefits must be harmonised

– The Constitutional Court in Belgium has ruled that it is unlawful to provide different pension benefits to blue collar and white collar workers. A proposed new law will place an obligation on employers in Belgium to harmonise pension benefits by 1 January 2015.

Action: Belgium employers with blue and white collar employees need to put in place an action plan for harmonising pension benefits by 2015.

European Pensions Agenda June 2014

6 UK – Government sets out plans to give greater freedom to pension savers and allow

employers to establish collective DC plans – The UK Government has confirmed its plans to introduce legislation to change the tax rules to give individuals with DC pension funds freedom over how they use their retirement savings from April 2015. The Government has also signalled its intention to allow Dutch style collective DC pension plans to be established in the UK.

Action: UK pension plans that offer DC benefits need to decide whether to allow their members to take advantage of the new flexibility under their plan Read more. Employers should monitor the legislation on collective DC to ensure it works for them.

7 Ireland – Pensions in payment can be reduced – The Irish Government has amended The

Pensions Act 1990 to enable section 50 benefit reduct