The demise of Pan-European-Pensions


This blog was prompted by reports that Britain is fast withdrawing QROPS status to many of our European partners.

A Qualifying Recognised Overseas Pension Scheme, or QROPS, is an overseas pension scheme that meets certain requirements set by Her Majesty’s Revenue and Customs (HMRC). A QROPS can receive transfers of UK Pension Benefits without incurring an unauthorised payment and scheme sanction charge.

Last month, 11 French and 19 Italian pension schemes were on the list of recognised overseas pension schemes published monthly by HMRC. But no schemes were listed for either of these countries when an updated list was released last week.

While the Treasury has not explicitly said this, the consensus is that tax relief granted in the UK is to ensure people receive benefits in later life, the withdrawn French and Italian plans offered access to cash prior to 55.

My journey to and from Europe


This is hardly the most dramatic of pre-Brexit interventions but it got me thinking about my personal involvement with the concept of the Pan European Pension and how, in retrospect, it informs on the more general debate on the right of a “non-elected bureaucracy to impose policy on a sovereign nation ” – as the Brexiteers might put it!

I guess my journey in and out of love with Europe has three stages.

  1. As a callow youth, trips to Europe involved ferries, trains and considerable expense. They usually involved sex, drugs and rock and roll in Paris or Amsterdam. Europe was noticeably foreign.
  2. In the mid nineties I went to work for Eagle Star which got bought by Zurich and the idea of business travel to and from the continent entered into the equation. I never did much travelling to Zurich but I went a couple of times to Brussels and started meeting people who believed in Pan European Pensions
  3. Lately, going to Europe has become so quick and cheap, that it’s not that exciting, there are always Euro in the house but even with cheap travel and free borders, Europe remains another country.

My personal journey is mirrored by a movement towards and then away from Europe as a business partner.

I remember attending a workshop organised by Zurich on “convergence”. This must have been around 2002 – at which point , it seemed likely that Britain would have joined the Eurozone and adopted the Euro as its currency. The five criteria laid down by Gordon Brown for us doing so, came close to being met but while the economic arguments seemed sound, behavioural economics were another matter, behaviourally, the obstinacy of British people was obvious to the politicians and convergence has become a non issue in the past ten years.

Increasing, in pensions policy, the idea of a Pan European Pension has become a threat to sovereignty rather than an economic necessity. Rather than talking about pooling of liabilities and assets and the breaking down of fiscal diversity, Britain is imposing bans on the transfer of money (see above).

Fifteen years ago, there was solidarity between the NAPF and its European equivalence. Today, the PLSA fights Brussels over the imposition of Solvency II on pension funding.

In hindsight, my personal and business journeys have converged on Europe and diverged from Europe – rather as the nation’s. I  felt the guilty pleasure of watching Farage being a bolshy Brit in Brussels and was surprised when I spoke to other liberal minded people who agreed with me. While I wasn’t bold enough to vote leave, I wouldn’t let my blog be used to publicise the advantages of remaining.

Like May and Corbyn ( I suppose) , I could see economic advantages in staying but behaviourally I wanted out.

We all know we are in for a bruising time over the next few years. I’ve been few a couple of divorces and know that the early months negotiations are peaceful. It’s only when you get to talking terms of separation, that regret and rancour creep in.

However, my personal observation from divorces is that it is the party that gets on the front foot and drives the process that has the upper hand. The idea that we can expect Brussels to be fair does not tally with my personal experience. Generally in divorces, you get what the law allows you and if the law isn’t clear, you make it up to suit your purposes.

The realities of separation

I am still surprised to hear pension  lawyers talking about European legislation as a consideration for what we do. I appreciate we want to keep our financial passports and that future trade-pacts or even a soft Brexit mean that we remain to a degree Pan-European.

But when I heard that we denying people the right to expatriate savings to France and Italy and game our tax system, I felt a little thrill of self-determination .

I was brought up a Liberal, I campaigned for greater integration with the EU and until recently I wanted us to adopt the Euro. It seems odd how much my mindset is changing. I still worry (feelingly) whether I am becoming  xenophobic. But my strongest instinct is now one of pride in my nationality and this expresses itself in my business thinking.

Recently I was told that any changes to the rules governing transparency would need to wait till Europe implemented on Priips. My blood boiled! It now appears that Priips and Mifid II are going to be strung out for years and  – were we to wait – millions of Britains would miss out on the benefits of transparent pensions.

The imposition of pan-european policy on pensions is too cumbersome to work. Europe is not able to harmonise tax, social insurances and it cannot harmonise pensions. The great Anglo Dutch corporates – Unilever and Shell can harmonise within their business units, but the ordinary person working for an Italian Bank in London, must expect to treat his time over here as a period of ex-patriation and that the re-patriation of benefits earned here , needs to respect national boundaries , tax, social insurance and local pension rules.

Is this what  “taking back control” feels like?

If this sounds insular, it is because I live on an island. No amount of conceptual abstraction can change that fact.

While I am about it, I might point out that as I finish this article, I have a smile on my face and not one of smug self-satisfaction. In writing this down, and I hope for you in reading this blog, a weight has been taken away and a sense of humour and adventure restored.



About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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1 Response to The demise of Pan-European-Pensions

  1. nigel Hawkes says:

    A conference on convergence seems so last century now. I can’t help wondering if the irony of holding it in Zurich was realised at the time.

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