UK rejects European pension plan

Britain rejected EU pension plans in the strongest terms yesterday, with minister Steve Webb vowing there will be “no compromise on Solvency II.” Webb described the rules as “pointless,” and “catastrophic,” as they would effectively mean the end of final salary pension schemes and cost UK firms hundreds of billions of pounds. The plans are based on insurance regulations that force firms to hold a capital buffer against short-term shocks – something which pension funds are less likely to face, thanks to the long-term nature of their business. However, the government needs more allies to oppose the move, as even the combined opposition of the UK, Germany, the Netherlands and Ireland is not enough to defeat the measure under the EU’s voting system.