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Single market for occupational pensions - are we there yet?

Balbuckaite, Lina (2008)
Department of Law
Abstract
For decades the largest part of European citizens has been dependant on State provided pensions. However, this safety net will not hold in the long run. Europe is going through a dramatic demographic change where the elderly group in the society is growing rapidly in size at the same time as the young generation is constantly decreasing. This change has a restraining effect on the public pension schemes as these plans are financed by the taxes of the young people working today. Alternative pension schemes such as occupational pensions provide the solution of compensating the losses in benefits from public pension schemes. However, for the occupational pension schemes to become a reliable and efficient pension complement, the Member States... (More)
For decades the largest part of European citizens has been dependant on State provided pensions. However, this safety net will not hold in the long run. Europe is going through a dramatic demographic change where the elderly group in the society is growing rapidly in size at the same time as the young generation is constantly decreasing. This change has a restraining effect on the public pension schemes as these plans are financed by the taxes of the young people working today. Alternative pension schemes such as occupational pensions provide the solution of compensating the losses in benefits from public pension schemes. However, for the occupational pension schemes to become a reliable and efficient pension complement, the Member States need to create a well functioning and competitive single market for the pension funds on EU level. This has turned out to be easier said than done as tax claims of the Member States have so far constituted a substantial obstacle in the process. Since the legislation concerning occupational pensions does not provide any solutions for dealing with direct tax issues as they fall outside the scope of the competences of the Commission, the disputes were to be settled before the Court. At this stage the road of creating of the single market experienced yet another bump - the Bachmann case where the Court accepted justifications provided by the Member State in question for not approving tax reliefs regarding contributions to foreign pension plans. Although only a one time phenomenon, this case opened up for a row of cases where the Member States attempted to justify, and thus to avoid reforming their systems, discriminatory tax treatment of activities related to pension plans situated abroad. It has taken more than a decade for the Member States to realise that the arguments accepted in Bachmann were not going to be accepted universally by the Court. Instead the Court has consistently directed the Member States to seek taxation solutions by the means of the Mutual assistance Directive, demands on the tax payer and other intra-State cooperation measures, thus emphasising the importance of proactive national administrative initiatives. Hence, the findings in this thesis lead to the conclusion that the process of building the single market for occupational pensions has nevertheless come far but the responsibility for a fast completion of the internal market now rests on whether the national authorities will carry through the necessary adjustments. (Less)
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author
Balbuckaite, Lina
supervisor
organization
year
type
H3 - Professional qualifications (4 Years - )
subject
keywords
EG-rätt, Skatterätt
language
English
id
1556009
date added to LUP
2010-03-08 15:55:19
date last changed
2010-03-08 15:55:19
@misc{1556009,
  abstract     = {For decades the largest part of European citizens has been dependant on State provided pensions. However, this safety net will not hold in the long run. Europe is going through a dramatic demographic change where the elderly group in the society is growing rapidly in size at the same time as the young generation is constantly decreasing. This change has a restraining effect on the public pension schemes as these plans are financed by the taxes of the young people working today. Alternative pension schemes such as occupational pensions provide the solution of compensating the losses in benefits from public pension schemes. However, for the occupational pension schemes to become a reliable and efficient pension complement, the Member States need to create a well functioning and competitive single market for the pension funds on EU level. This has turned out to be easier said than done as tax claims of the Member States have so far constituted a substantial obstacle in the process. Since the legislation concerning occupational pensions does not provide any solutions for dealing with direct tax issues as they fall outside the scope of the competences of the Commission, the disputes were to be settled before the Court. At this stage the road of creating of the single market experienced yet another bump - the Bachmann case where the Court accepted justifications provided by the Member State in question for not approving tax reliefs regarding contributions to foreign pension plans. Although only a one time phenomenon, this case opened up for a row of cases where the Member States attempted to justify, and thus to avoid reforming their systems, discriminatory tax treatment of activities related to pension plans situated abroad. It has taken more than a decade for the Member States to realise that the arguments accepted in Bachmann were not going to be accepted universally by the Court. Instead the Court has consistently directed the Member States to seek taxation solutions by the means of the Mutual assistance Directive, demands on the tax payer and other intra-State cooperation measures, thus emphasising the importance of proactive national administrative initiatives. Hence, the findings in this thesis lead to the conclusion that the process of building the single market for occupational pensions has nevertheless come far but the responsibility for a fast completion of the internal market now rests on whether the national authorities will carry through the necessary adjustments.},
  author       = {Balbuckaite, Lina},
  keyword      = {EG-rätt,Skatterätt},
  language     = {eng},
  note         = {Student Paper},
  title        = {Single market for occupational pensions - are we there yet?},
  year         = {2008},
}