AEIP Newsletter • Week 11

15 – 19 March 2010

Table of Contents

EU FINANCIAL SERVICES............................................................................................................................... 2
I. VENTURE CAPITALISTS: FUNDS REGULATION WILL 'DESTROY' INNOVATION .................................................... 2
II. DUTCH PENSION ASSETS INCREASED TO €649BN – DNB................................................................................. 2
III. HUNGARIAN GROWTH FUNDS RETURN 26% ................................................................................................... 2
IV. UK GOV'T TARGETS PENSIONS FOR INFRASTRUCTURE FUNDING .................................................................... 3
V. DUTCH BAKERS’ SCHEME PICKS LOMBARD AS FIDUCIARY MANAGER ............................................................. 3
EU INTERNAL MARKET .................................................................................................................................. 4
I. OFFSHORE HEDGE FUNDS PUT EU REGULATION IN DOUBT ............................................................................... 4
II. CRUCIAL MEETING TO EXAMINE GREEK AID PACKAGE ................................................................................. 4
III. EU TO PROVIDE 45,000 MICRO-LOANS TO UNEMPLOYED AND SMALL ENTREPRENEURS ................................ 4
IV. EURO AREA ANNUAL INFLATION DOWN ......................................................................................................... 4
V. CONSTRUCTION OUTPUT DOWN ...................................................................................................................... 5
EU HEALTH ......................................................................................................................................................... 5
I. A NEW ERA IN EHEALTH .................................................................................................................................. 5
II. NEW LEGISLATION TO REDUCE INJURIES FOR 3.5 MILLION HEALTHCARE WORKERS IN EUROPE ...................... 5
EU SOCIAL AFFAIRS......................................................................................................................................... 5
I. COMMISSION GETS WIRES CROSSED ON EXIT STRATEGIES: NGOS .................................................................... 5
II. PMI AND STANDARD LIFE TEAM UP ON DC PENSIONS RESEARCH ................................................................... 6
III. EC PENSIONS GREEN PAPER TO CARRY FOCUS ON TRANSPARENCY AND KNOWLEDGE ................................... 6
ECONOMY ........................................................................................................................................................... 6
I. EMPLOYMENT DOWN IN THE EURO AREA .......................................................................................................... 6
II. EU GLOBALISATION FUND PAYS €40 MILLION ................................................................................................ 7
III. EU ‘SURVEILLANCE’ OF NATIONAL ECONOMIES ............................................................................................ 7
IV. EU AT ODDS OVER TREATY CHANGE FOR EMF.............................................................................................. 7
EVENTS AND COURT CASES.......................................................................................................................... 7
I. SYMPOSIUM ON "HEALTHIER AND SAFER WORKPLACES" ................................................................................ 7
II. EUROPEAN COURT OF JUSTICE CALENDAR".................................................................................................... 8
IN DEPTH ANALYSIS ........................................................................................................................................ 9
I. NEW LEGISLATION TO REDUCE INJURIES FOR 3.5 MILLION HEALTHCARE WORKERS IN EUROPE........................ 9
II. EC PENSIONS GREEN PAPER TO CARRY FOCUS ON TRANSPARENCY AND KNOWLEDGE................................... 10

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EU Financial Services

EU Financial Services

I. Venture capitalists: Funds regulation will 'destroy' innovation

According to a survey released on 15 March, two thirds of European venture capitalists would reduce
their investments by over 30% if new EU rules on private equity (Alternative Investment Fund
Managers Directive) come into force. The European Private Equity and Venture Capital Association
pointed out that the new rules run counter to the Europe 2020 growth strategy, which specifically lists
venture capital as a key driver of innovation. The investment community stepped up the pressure on
EU finance ministers who met in Brussels on 16 March and were expected to discuss the AIFMD.
(EuroActiv – 15/03/2010) Spain, who currently holds the chair for EU ministerial meetings, surprised
everyone on the very day of the ECOFIN meeting (16 March) by postponing the decision on the above
mentioned law. This decision was taken on the basis of a late telephone call between Mr. Zapatero
and Mr. Brown, who feared that the new rules could seriously harm the City’s fund industry, which
helps drive European economic growth. (The Wall Street Journal Europe – 17/03/2010).

II. Dutch pension assets increased to €649bn – DNB

The combined value of pension funds’ investments increased for the fourth consecutive quarter in
2009 to €649bn, pensions supervisor De Nederlandsche Bank (DNB) has claimed. “This growth
reflected €5bn of net securities purchases and €18bn of price gains on shares and other equities”, it
said, while adding that bonds’ prices have remained almost unchanged compared to the third quarter
of 2009. The watchdog noted the schemes’ combined assets are still €20bn short of the total reached
at the end of 2007. According to DNB, Dutch pension funds continued shifting their securities
transactions from direct to indirect investments through mutual investment funds, largely because ABP
and PfZW now technically feed their assets through funds managed by APG and PGGM. Mutual
Investment Funds (MIFs) have been set up by pension asset managers, such as APG and PGGM, to
achieve economies of scale and cost reductions through pooling of investments by pension funds and
other institutional investors. Aside from the focus on a 58% rise in investment ‘units’, as explained,
more pension fund money flowed into fixed income from outside the Netherlands. “€4bn has been
directly invested in government bonds from the eurozone, from France and Germany in particular,”
stated the regulator. At the same time, the ratio between equity and fixed income holdings remains
constant at 31% and 42% respectively. However, there has also been a seven percentage point shift
from Dutch to foreign securities, alongside renewed interest in eurozone debt. (IPE.com, 12/03/2010)

III. Hungarian growth funds return 26%

The growth portfolios of the 19 mandatory Hungarian pension funds returned 25.95% over the last
year with the average performance of all funds standing at 18.6%. Figures released by the Hungarian
pension fund association Stabilitas showed an average weighted performance for the conservative or
“classic” funds of 12.11%, balanced funds stood at 17.75% and growth funds at 25.95% - confirming
earlier estimates. This brings the 10-year average performance - since 2000 - of classic funds to
7.22%, to 6.64% for balanced funds and 5.77% for growth portfolios. Unweighted figures from the
Hungarian supervisor PSZAF show an average 2009 performance of 18.1% with each of the three
portfolios returning 11.45%, 17.42% and 25.62% on average respectively. According to Stabilitas
78.6% of all assets are in the growth portfolios which can hold over 40% in equities and almost
another 20% in the balanced portfolios with an equity exposure above 10%. Assets in the mandatory
system increased to HUF2.5trn (€9.3bn) from HUF1.8trn at year-end 2008 and are now back at their
2007 level. The eight companies offering voluntary pension funds posted an average return of
16.76%. (IPE.com, 15/03/2010)

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IV. UK gov't targets pensions for infrastructure funding

The UK Treasury will target pension funds as a primary source of funding for billions of pounds in
infrastructure projects, using a national bank which will bypass traditional fund management
companies. As part of a bid to raise an estimated £500bn (€548bn) in infrastructure investment over
the next decade, the business secretary Peter Mandelson said traditional methods for investing in
infrastructure were costly, time consuming and risky, and government needed to take a central role in
providing the institutions necessary to support private investment. Lord Mandelson said: “We need to
mobilise private investors on a totally new scale. That has to include examining the case for public-
sector backed financial institutions to achieve this mobilisation.” A more detailed outline of a national
infrastructure bank is expected in next week’s Budget. The need for easier access to this type of
investment was highlighted by David Brief, chief executive of the £11bn BAE Systems pension fund,
who said infrastructure funds that met the long-term nature of pension funds were severely limited in
the UK. “We wanted long-dated funds, preferably more than 15 years, with inflation protection, run by
experienced fund managers that didn’t charge private equity-style fees and proffered high single or
low double digit returns,” Brief said. Yet, Brief noted that most fund managers offered quite the reverse
proposing high double-digit returns with private equity fee levels, short time horizons and limited
experience. “There were only two fund managers that offered any kind of track record,” he added. At
present, infrastructure accounts for just 0.7% of the UK’s total pension fund asset allocation presenting
an extremely attractive proposition for the UK government, which is struggling to fund future
expenditure thanks to a huge public debt. “The reality is that the bulk of new investment will have to
come from the private investors. In Britain and around the world, savers looking to the long term of
their retirement are a huge pool of capital well suited to these kinds of long-term investments,”
Mandelson said. Last week the Pension Protection Fund (PPF) announced its intention to allocate
20% of total assets to alternative investments including infrastructure; a move which is indicative of a
potential trend across the UK. (IPE.com 16/03/2010)

V. Dutch bakers’ scheme picks Lombard as fiduciary manager

The €2bn pension fund for the bakery sector has appointed Swiss asset manager Lombard Odier
Darier Hentsch (LODH) as its new fiduciary manager. As of 1 April, the fiduciary management of 75%
of its assets will be transferred to LODH, while the remaining assets will stay with its present manager
Robeco as a direct investment mandate, Stichting Pensioenfonds voor het Bakkersbedrijf said in a
statement. Until now the assets of the bakers’ pension fund have been managed by Groningen-based
Beon, which was initially the scheme’s own asset manager and pensions provider, until it was taken
over by Robeco in Rotterdam several years ago. “The pension fund does not agree with Robeco’s
plan to further integrate Beon into the investment process of Robeco, in order to increase the overall
efficiency,” Leo van Beekum, employee chairman of the scheme, told IPE. “We want to stick with
Beon’s present investment policy,” according to Van Beekum, who added that one of LODH’s specific
tasks will be to find managers for investments in Asia. According to the chairman, Beon’s four-strong
investment team will also join Lombard Odier. Van Beekum stressed that the new fiduciary manager
will work closely with the pension fund’s investment committee. “Lombard will provide us with details
on figures and developments, which could affect for example our cover ratio, on a daily basis,” he
added. According to the pension fund, its cover ratio had recovered from 95% at the end of 2008 to
106.1% at the end of last February. However, after it had already factored in a 3% provision for
increased longevity, the scheme said it has meanwhile decided to make an additional reservation of
another 3% for the same purpose. Because of the scheme’s risk-return ratio, based on its investment
mix, its required financial reserves equate to a cover ratio of 114.4%. The bakers’ scheme has
approximately 235,240 participants, of whom 40,570 are active participants and 177,075 are deferred
members. (15/03/2010 IPE.com)

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EU Internal Market

EU Internal Market

I. Offshore hedge funds put EU regulation in doubt

The UK is pushing for EU-wide recognition of hedge funds that have won approval on its territory.
They would like to see a creation of a so-called “EU passport”, which would grant to a foreign-based
hedge fund access to the whole EU market if it were to comply with rules that are “at least equivalent”
to those in the EU passport. However, such an agreement appears unattainable at the moment as
Britain is the only EU member state making such demands. (euractive.com, 15/03/2010)

II. Crucial Meeting to Examine Greek Aid Package

The Eurogroup meeting of eurozone finance ministers on Monday 15 March (starting at 5.00pm) will
examine Greece's budget and finance situation, the economic outlook and the situation on the money
markets. Some sections of the media are suggesting that agreement may be reached, or a meeting of
minds at least, on details of a financial aid package for the country. There has been no official word of
this, yet neither has there been any official denial. The chair of Eurogroup, Jean-Claude Juncker,
wants to sound out all the eurozone countries' views and it is not yet clear whether he will be
announcing anything after Monday's meeting. According to an article in French newspaper Le Monde
on Saturday 13 March, two options are on the table. Either a loan facility funded by the EU member
states, the granting of which would be coordinated by the European Commission; or a loan facility
funded by EU loans backed by various countries. Some EU countries, like the UK and Sweden,
suggest that a better option would be funding from the International Monetary Fund (IMF). Germany
may well make clear what it thinks about the recently mooted idea of setting up a European Monetary
Fund. (Agence Europe 12/03/2010)

III. EU to provide 45,000 micro-loans to unemployed and small entrepreneurs

EU Employment and Social Affairs Ministers have agreed on March 8, 2010 a new facility to provide
loans to people who have lost their jobs and want to start or further develop their own small business.
The European Microfinance Facility will have a starting budget of €100 million which could leverage
more than €500 million in cooperation with international financial institutions such as the European
Investment Bank (EIB) Group. The initiative is part of the EU's response to the crisis and is especially
targeted at people who cannot normally obtain credit because of the economic crisis and the current
lack of credit supply. Those helped under the initiative will also be able to benefit from mentoring,
training and coaching as well as assistance in preparing a business plan, in close cooperation with the
existing European Social Fund. An initial budget of €100 million is expected to leverage €500 million of
credit in cooperation with international financial institutions such as the EIB Group. This could result in
around 45,000 loans over a period of up to eight years. In addition, the possibility for these same
people to benefit from interest rate rebates through the European Social Fund will make it easier for
them to start their new business. (europa.eu/rapid 08/03/2010)

IV. Euro area annual inflation down

Euro area1 annual inflation was 0.9% in February 20102, down from 1.0% in January. A year earlier
the rate was 1.2%. Monthly inflation was 0.3% in February 2010. EU3 annual inflation was 1.4% in
February 2010, down from 1.7% in January. A year earlier the rate was 1.8%. Monthly inflation
was 0.3% in February 2010. (16/03/2010 Eurostat)

Eurostat Report available in French and English upon request.

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V. Construction output down

In the construction sector, seasonally adjusted production1 fell by 2.2% in the euro area2 (EA16) and
by 2.0% in the EU272 in January 2010, compared with the previous month. In December 20093,
production decreased by 1.0% in the euro area, but rose by 0.8% in the EU27. Compared with
January 2009, output in January 2010 dropped by 12.5% in the euro area and by 8.4% in the EU27. .
(17/03/2010 Eurostat)

Eurostat Report available in French and English upon request.

EU Health

EU Health

I. A New Era in eHealth

Commission Vice President Neelie Kroes will call on the eHealth industry, health professionals and
national health Ministers to "step up a gear" in order to deliver eHealth for all in her keynote speech to
the World of Health IT conference in Barcelona today. "Our finances demand it. Our citizens expect it.
The technology is ripe," Kroes will say. Kroes will also welcome a new commitment by EU Health
Ministers to increase co-operation on eHealth initiatives. Europe is the world leader in eHealth, thanks
in part to over 20 years of Commission research (450 projects and funding of €1 billion). For her part,
Kroes will announce that eHealth will play a key part in her Digital Agenda over the next five years to
accelerate the positive impact of information and communications technologies on people's everyday
lives. Kroes will underline that improving eHealth systems is one of the best ways to address the
challenge of keeping people healthy and comfortable in the coming decades against the background
of Europe's ageing population (29% over 65 years old in 2050) combined with the deepest financial
crisis in decades. (europa.eu, 15/03/2010)

II. New legislation to reduce injuries for 3.5 million healthcare workers in Europe
EU Employment and Social Affairs Ministers have on March 8, 2010 adopted a Directive to prevent
injuries and infections to healthcare workers from sharp objects such as needle sticks – one of the
most serious health and safety threats in European workplaces and estimated to cause 1 million
injuries each year. See in depth analysis page: 09
EU Social Affairs

EU Social Affairs

I. Commission gets wires crossed on exit strategies: NGOs

"People are ultimately what Europe is about, and the crisis has highlighted the strength of the
European social model and the EU's joint approach to tackling the crisis' social impact," said László
Andor, EU commissioner for employment, social affairs and inclusion. The European Commission is
contradicting itself, NGOs claimed, pointing out that a recently published social protection report goes
against key priorities outlined in the bloc's long-term 'Europe 2020' strategy. The Europe 2020
blueprint ignores the importance of ensuring social protection in exit strategies, despite the EU

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executive and member states calling for exactly that in a joint report published last week, European
social NGOs have claimed. European social affairs and employment ministers met in Brussels on 8
March 2010, to discuss the Europe 2020 strategy, which the Commission hopes will form the
backbone of sustainable growth in Europe for the 2010-2020 period. They adopted a 'Joint Report on
Social Protection and Social Inclusion' which "focuses on drawing lessons from Europe's response to
the crisis". The joint report argues that the EU's social tools – "welfare systems and specific short-term
policies" – have been vital in saving Europe from "the worst effects" of the global recession. "Policy
intervention and European welfare systems proved instrumental in containing the economic and social
impact of the crisis," it argues. However, a representative of the Platform of European Social NGOs
(Social Platform) told EurActiv that "the Commission is contradicting itself, on the one hand, the joint
report clearly states that you can't have exit strategies without clear guidelines for social protection
systems, while on the other hand, the Commission's EU 2020 strategy has no mention of any social
aspects built into the sections dealing with 'exit strategies'". The important role of social welfare
systems in easing Europe out of the crisis, so heavily emphasised in the joint report, is largely lacking
in Europe 2020, the analyst claimed, with the Commission instead outlining that member states will
have to make sharp social spending cuts in order to restore growth. (Euractiv.com, 08/03/2010)

II. PMI and Standard Life team up on DC pensions research

The Pensions Management Institute (PMI) is joining forces with insurer Standard Life to research
alternative methods of providing adequate retirement savings, starting with analysis of existing defined
contribution (DC) provision. Entitled the 'PMI/Standard Life DC Pulse', the initial project will examine
several key themes for companies already offering some form of DC scheme, and investigate whether
their existing pension arrangement will be "fit for purpose" following the introduction of the National
Employment Savings Trust (NEST) in 2012. Vince Linnane, chief executive of the PMI, said: "Whilst
there is an awful lot of dust still to settle from the displacement of the defined benefit (DB) pension
schemes that have been the mainstay of the UK pension scene for over 25 years, it is vital that work
commences now on what the new pensions environment will look like for the next 25."He pointed out
that DC schemes in some form look like being the new norm for the pensions industry. Therefore: "We
have to make them work, as effectively and as securely as possible, to safeguard people’s retirement
income. This vital research project will feed into that and help allay fears about DC pensions."
(IPE.com 18/03/2010)

III. EC pensions green paper to carry focus on transparency and knowledge

Transparency, member information, investment strategy and governance are all key elements that will
fall under the spotlight of the European Commission’s consultation on a European pensions
framework, according to Karel van Hulle, head of the insurance and pensions unit for the EC’s Internal
Market and Services DG. See In depth analysis page: 10
Economy

Economy

I. Employment down in the euro area

The number of persons employed in the euro area1 (EA16) fell by 0.2% (347 000 persons) in the
fourth quarter of 2009 compared with the previous quarter, according to national accounts estimates
published by Eurostat, the statistical office of the European Union. In the same period, the number of
persons employed in the EU271 decreased by 0.3% (583 000 persons). In the third quarter of 2009,

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employment declined by 0.5% in both zones. These figures are seasonally adjusted. (europa.eu/rapid
12/03/2010)

Eurostat Report available in French and English upon request.

II. EU Globalisation Fund pays €40 million

The European Commission will make payments from the European Globalisation adjustment Fund
(EGF) of almost € 40 million to help nearly 7,000 dismissed workers in four different sectors: The EGF
is co-financing active labour market policy measures, specific to the needs of the workers in each of
the sectors, such as occupational guidance, job search assistance and job search allowances, the
promotion of entrepreneurship as well as training and incentives for companies recruiting redundant
workers. (ec.europa.eu, 08/03/2010)

III. EU ‘surveillance’ of national economies

EU finance ministers on Tuesday supported greater EU involvement in monitoring national economic
policies, agreeing that more "candid" policy recommendations could be made to member states on
issues such as employment, education or the fight against poverty. "Enhanced country surveillance
will be fundamental to achieving the overriding goals of the Europe 2020 strategy" for growth and jobs,
the ministers said in a statement after the meeting. "This would include both the issuing of more
precise and candid policy recommendations to member states and a closer follow-up of
recommendations than in the past," the ministers added in a reference to the defunct Lisbon Strategy
for growth and jobs. (Euractiv 18/03/2010)

IV. EU at odds over treaty change for EMF

Policymakers are debating whether a proposed 'European Monetary Fund' would require changes to
the EU's Lisbon Treaty, as predicted by German Chancellor Angela Merkel. The EU executive
believes it would, while politicians on the margins say it would not. "Plans for a European Monetary
Fund could imply that we indeed need to change the EU treaty," a European Commission official told
EurActiv. However, socialist policymakers argue that a monetary fund, or as they have proposed it, a
'trustee fund', would not require any changes to the treaty. The prospect of treaty change would
dissuade EU leaders from moving ahead and is reminiscent of recent referenda on the ratification of
the Lisbon Treaty. (Euractiv 18/03/2010).
Events and Court Cases

Events and Court Cases

I. Symposium on "Healthier and Safer Workplaces"

22 & 23 March 2010 in Brussels - The European Commission and the Japanese Ministry of Health,
Labour and Welfare are jointly organising a Symposium on "Healthier and Safer Workplaces." This
Symposium is the thirteenth in a series of EU-Japan events organised since 1991, with a view to
promoting a better mutual understanding and the exchange of experiences in the field of employment
and labour market policies. This year, it will aim at discussing on health and safety at work and
facilitating debates on policy responses, comparative analysis and possible exchange of best

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practices. The Symposium will bring together around 80 participants, including officials, social partners
and academic experts from the EU and Japan. (ec.europa.eu/social 16/03/2010)

II. European Court of Justice Calendar"

Date Case Language Courtroom

Judgment Olympique Lyonnais - Freedom of FR New Great

C-325/08 movement for persons Courtroom
Court of Justice - Grand Chamber
Tuesday
16/03/2010 Reference for a preliminary ruling – Cour de cassation (France) – Interpretation of
09:30 Article 39 EC – National provision obliging a football player to pay compensation to
the club which trained him when, at the end of his training period, he signs a
professional contract with a club of another Member State – Barrier to the freedom of
movement for workers – Possible justification of such a restriction in the need to
encourage the recruitment and training of young professional players
Advocate General : Sharpston

Hearing Lassal - Citizenship of the Union EN Courtroom III –

C-162/09 Court of Justice - Third Chamber Level 6

Wednesday Interpretation of Article 16(1) of directive 2004/58/EC of the European Parliament and
17/03/2010 of The Council of 29 April 2004 on the right of citizens of the Union and their family
09:30 members to move and reside freely within the territory of the Member States (OJ
2004 L 158, p. 77) – Union citizen who resided lawfully in the United Kingdom for five
years prior to 30 April 2006, being the last date for transposition of the directive, and
then left the territory for a period of 10 months – Taking into account of the period
ending prior to 30 April 2006 for the purposes of entitlement to the grant of a
permanent right of residence

Hearing Purrucker - Area of Freedom, Security DE New Great

C-256/09 and Justice Courtroom
Court of Justice - Second Chamber

Wednesday Reference for a preliminary ruling – Bundesgerichtshof – Interpretation of Chapter 3

17/03/2010 of Council Regulation (EC) No 2201/2003 of 27 November 2003 concerning
09:30 jurisdiction and the recognition and enforcement of judgments in matrimonial matters
and matters of parental responsibility, repealing Regulation (EC) No 1347/2000 (OJ
2003 L 338, p. 1) – Application of the recognition and execution rules in that
regulation to a provisional measure awarding custody of a child to its father and
ordering the return of the child, held by its mother in another Member State, to its
father

Judgment Gielen - Freedom of establishment NL New Great

C-440/08 Court of Justice - First Chamber Courtroom

Thursday Interpretation of Article 43 EC – National legislation granting self-employed business

18/03/2010 operators the right to deduct a flat-rate amount from their profits provided that they
09:30 have devoted at least 1 225 hours per calendar year to the activities of the business

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–No account taken, solely in the case of a non-resident taxpayer, of hours devoted to
an undertaking established in another Member State
Advocate General : Ruiz-Jarabo Colomer

Hearing Brouwer - Freedom of movement for NL Courtroom I -

C-577/08 persons Level 8
Court of Justice - Fourth Chamber
Thursday
18/03/2010 Reference for a preliminary ruling – Arbeidshof te Antwerpen – Interpretation of
09:30 Article 4(1) of Council Directive 79/7/EEC of 19 December 1978 on the progressive
implementation of the principle of equal treatment for men and women in matters of
social security (OJ 1979 L 6, p. 24) – National legislation providing for notional and
flat-rate daily wages that are lower for women than for men when calculating
retirement pensions for salaried frontier workers

In Depth Analysis

In Depth Analysis

I. New legislation to reduce injuries for 3.5 million healthcare workers in Europe
EU Employment and Social Affairs Ministers have on March 8, 2010 adopted a Directive to prevent
injuries and infections to healthcare workers from sharp objects such as needle sticks – one of the
most serious health and safety threats in European workplaces and estimated to cause 1 million
injuries each year.

The Directive translates into Community law an agreement negotiated by the European social partner
organisations in the sector, which employs around 3.5 million people.

Speaking at the Council of Ministers meeting, László Andor, EU Commissioner for Employment, Social
Affairs and Inclusion said: "The healthcare sector is one of the biggest employers in Europe and
needles represent a real risk to workers, both in terms of injuries and increased rates of life-
threatening infections like HIV or hepatitis”. He added “This new Directive will better protect workers
and their families while reducing the burden of injuries on European health services.”

The new Directive implements in law a framework agreement on prevention from sharp injuries in the
hospital and healthcare sector signed in July 2009 by the European Public Services Union (EPSU)
and the European Hospital and Healthcare Employers' Association (HOSPEEM) – European Social
partner organisations.

It aims to:
• achieve the safest possible working environment for employees in the sector and protect
workers at risk, as well as patients;
• prevent injuries to workers caused by all types of sharp medical objects (including needle
sticks);
• set up an integrated approach to assessing and preventing risks as well as to training and
informing workers.

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The legislation specifically addresses one of the priority objectives of the EU's current strategy for
health and safety at work, which aims to cut workplace accidents by 25% by 2012.
(ec.europa.eu/social/08/03/2010)

II. EC pensions green paper to carry focus on transparency and knowledge

Transparency, member information, investment strategy and governance are all key elements that will
fall under the spotlight of the European Commission’s consultation on a European pensions
framework, according to Karel van Hulle, head of the insurance and pensions unit for the EC’s Internal
Market and Services DG.

Speaking at an EFRP meeting in Brussels yesterday, van Hulle revealed both himself and Georg
Fischer, from the Employment and Social Affairs DG, and another colleague, will investigate wide-
ranging pensions strategy which include how individuals might be better informed about the risks their
pensions carry, as well as whether the current regulatory regime is appropriate to a European
pensions framework.

His key responsibilities are already focused on the IORP Directive and Solvency II so van Hulle – in
his capacity to look at the second and third pillar pension regimes – will assess whether the IORP
Directive needs to be adapted to better incorporate defined contribution pensions, among other key
factors.

“It is not for the Commission to say everyone has to do it this way,” said van Hulle. "There are
implications for the IORP Directive and transparency is the key. We have problems that people don’t
know where they stand [in relation to retirement income]. It is absolutely clear that education is not the
solution, but we need to do more. Should the Commission do more on education and on auto-
enrolment? And is the IORP Directive properly equipped to deal with DC schemes?” he asked.

Among the issues to be reviewed, van Hulle said the EC will look in particular at how investors can be
better informed of investment risks. He cited a risk profile diagram for UCITS investments – showing
investors selecting between 1 and 7 as their preferred profile and investment strategy, with 1 being low
risk and low reward and 7 being high risk, high reward.

He said the review is also likely to question the linkage between investment strategy and
remuneration, and where commission might fit too.

The green paper will also consult on whether there is any need to review investment rules under
Article 18 of IORP Directive, to ask what the pros and cons of investment strategies might be, and will
also look at active management to ask whether it leads to short-term decision-making on what should
be long-term investments. Internal Market Commissioner Michel Barnier also comments that a review
of Directive 2003/41/EC governing occupational retirement provision institutions might even be
considered

The paper will also question the independence and governance of pension trustees, according to van
Hulle.

“What type of investments do [trustees] adopt? What is their guidance? Do they have sufficient
knowledge about what they are doing? We have a number of rules that can be spelled out a little more
clearly,” he added.

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He noted there are no solvency rules for DC schemes, while there are solvency rules for providers
under Solvency II, so the ongoing row between IORPs and providers is likely to be resurrected as he
asks of IORPs: “What do you do about the risks to operational risk and liquidity risk?”

“I think what we really want is working schemes to show there is an appropriate solvency treatment
which is risk-based, and if you offer guarantees your risk increases. You need to offer an appropriate
solution – just risk-based, that is all I want,” he argued.

In a later discussion on DC pensions, where members of the audience questioned whether it is

necessary for pension fund members to have a lot of in-depth information about their pensions, van
Hulle suggested one solution to the lack of investor knowledge might be to create a database which
shows what the individual might receive in income when they retire at 65 or 67.

Following evidence from the EFRP suggesting 80% of DC members use the default fund, van Hulle
also suggested it is not because the subject is difficult that they do not engage, but argued it is a “two-
way street” between members and pension providers, whether they are through occupational plans or
as individuals.

“The solution now is not to put the burden on the consumer. The problem with pensions is it is a long-
term issue. We need to find a clear way of showing what it means to them. And because there is not
enough transparency in information, 80% of people in default funds is not good,” said van Hulle.

As a result of the discussion, van Hulle said decumulation and how income may be distributed at
retirement is likely to be included as a focus of the green paper, which is described as approximately
10-15 pages in length “with annexes”.

Brendan Kennedy, chief executive of the Irish Pensions Board – also sitting on the EFRP discussion
panel - noted annuities were first designed to last 7-10 years, but today have to last an average of 25
years, so annuity providers are struggling to deliver products which offer good return guarantees over
such a long period.

In response, Georg Fischer argued it was up to the pension industry to devise and design new ideas
for the decumulation phase, and meet this challenge.

“I would not believe that you would call something a pension and it doesn’t insure you for longevity. If
the insurance industry cannot provide them, you should go back to the drawing board,” said Fischer.

Van Hulle added: "Decumulation is definitely a question we should raise. I think you need to design
new products for a system that has changed. Traditional annuities will have to change. Where is the
creative thinking?” (17/03/2010 IPE.com) (Agence Europe 12/03/2010)

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