EU pensions forced to disclose pension liabilities
14
Mar
The European Parliament voted yesterday to insist that EU governments put all data on their unfunded pension liabilities into the public domain.
Many states prefer not to include long-term pension liabilities in their national accounts, reasoning that these are too uncertain to pin down. However, this does not stop international accounting standards-setters from insisting that private-sector companies disclose all such long-term liabilities in their accounts.
Until recently, this was the case in the UK too. But in April of last year, Britain became the first EU country to comply with the new EU rules in advance, with the Office for National Statistics setting out a total pension liability, public and private, of £7.1 trillion.
That was made up of about £2 trillion of private-sector liabilities, plus £5 trillion that the government must pay in respect of both the ordinary state pension, due to all workers who have paid enough National Insurance, and the pensions it owes to workers in the NHS, civil service, armed forces and schools.
Yesterday’s vote in the European Parliament is one of the final steps in making this increased disclosure mandatory for all EU countries. The Parliament, European Commission and European Council, which is the gathering of national governments, have been in discussions over the proposal in recent months.
Unfortunately, four large member states were reluctant to have mandatory transmission of pension liabilities data, which the Parliament saw as a blatant attempt to keep potentially embarrassing information out of the public domain and away from calculations.
The countries in question were Germany, France, Portugal and Spain, but their objections now seem to have been overcome.
Yesterday’s vote was the Parliament’s formal ratification of the final agreed text. The Council still has to ratify, but it would be highly unusual for it not to do so, following the negotiations.
Nigel Green deVere Group
14th March
Tags:
pension liabilities
That’s a scary report ,
In my personal opinion We not talking billions but TRILLIONS!