Pensions minister Steve Webb has vowed that he will not give in to "catastrophic" EU plans which would impose funding rules on British occupational pension schemes.

Webb said there would be "no compromise" over the "pointless" proposals, which could see many pension schemes in the UK being killed off if they would come into force.

The European Insurance and Occupational Pensions Authority (EIOPA) has been looking at new rules in order to assess the solvency of pension funds. Schemes say these new rules would ramp up their costs as much more funding would need to be injected.

Previous research by accountancy firm PricewaterhouseCoopers indicated that the changes could cost UK businesses up to £500bn. These extra charges would presumably be recharged to savers, leaving them with less generous pensions.

The new Solvency II rules would affect all private sector companies offering defined benefit (DB) schemes in Britain.

Webb said that the uncertainty over the new measures created an atmosphere in which schemes were becoming increasingly unsure about how they should invest their funds.

"There will be no compromise," Webb said. "We will not let up until we make the [European] Commission see sense."

Webb said he expected them to publish an impact assessment to expose the effect these rules would have on UK pension schemes, adding he didn't understand how they got so far without this.

First published 22.06.2012

azeevalkink@wilmington.co.uk