WRITTEN QUESTION E-2415/01 by Glyn Ford (PSE) to the Commission. Equitable Life and pensions.
Date: 2001-09-05
Institutions: European Parliament, Provisional data
Subjects: United Kingdom, investment company, investment income, pension scheme, supplementary pension

6.6.2002

EN

Official Journal of the European Communities

C 134 E/31

Without prejudice to Title IV of the EC Treaty, the Member States may take joint actions pursuant to
Article 14(3) of the Treaty on European Union. Within that framework, Member States may undertake
jointly to either refuse visas for certain prominent citizens of third countries or to start them on a
preferential basis if they take the view that such measures serve the objectives of the Common Foreign and
Security Policy.

(1) OJ L 81, 21.3.2001.
(2) See the Schengen Convention and the Common Consular Instructions, OJ L 239, 22.9.2000.
(3) See points V 2,2 and V 2,4 of the Common Consular Instructions.

(2002/C 134 E/031)

WRITTEN QUESTION E-2415/01

by Glyn Ford (PSE) to the Commission

(5 September 2001)

Subject: Equitable Life and pensions

Equitable Life, a financial investment company in the UK, has had to review and, consequently, downgrade
the amount its investors can expect to receive as a pension because of its poor investment strategy.

Thousands of people have thus seen the pension, which they have saved for over many years, considerably
reduced.

Does the Commission plan to review the provision of pensions by private companies?

Does it envisage some form of regulation to ensure that pension funds are properly managed and on
course to meet their targets, or at the very least that their value is not reduced, thereby leaving recipients
badly off in their retirement?

Answer given by Mr Bolkestein on behalf of the Commission

(17 October 2001)

The Commission regrets that many policyholders may see a reduction in the expected benefits of their
pensions policies as a result of the difficulties confronting Equitable Life. The Commission is aware that the
British Government has announced that a full
independent inquiry, headed by Lord Penrose, will be
conducted into the circumstances leading to the current situation of Equitable Life. The Commission does
not plan to review the provision of private pensions by life assurance undertakings.

The Commission has recently submitted a proposal for a directive of the Parliament and of the Council on
the activities of institutions for occupational retirement provision (1). It is intended to apply to institutions
operating on a funded basis for the purpose of providing retirement benefits on the basis of an agreement
between the employer and the employees. It is not intended to apply to pension schemes taken out by
individuals by contract directly with a product provider, usually a life insurance company, and where
participation is not related to employment and the exercise of a profession.

One of the primary goals of the proposed directive is to establish a sound prudential framework for the
regulation of pension funds to ensure that such funds are properly managed and their beneficiaries
interests securely protected throughout the Community. The proposal, which is a priority of the Financial
Services Action Plan, is still to be adopted by the Council and Parliament.

(1) OJ C 96 E, 27.3.2001.