The European Commission has challenged several member states' investment restrictions for pension funds, said EC Internal Markets Commissioner Mario Monti. Mr. Monti declined to name the countries, but sources suggested they include Belgium and Finland. Failure to remove the restrictions could result in cases being brought to the European Court of Justice.
Mr. Monti told the European Federation for Retirement Provision that investment restrictions amount to a ``hidden tax'' on pension funds because they impair returns and ultimately increase contributions.
Mr. Monti also said the commission will draft a report on European pension funds for presentation this fall. The report will cover whether pension funds should be subject to the same rules as insurance companies; the need to optimize investment strategies; the need for efficient capital markets; how to provide pension coverage for workers moving throughout the EU; and tax obstacles to creating pan-European pension funds.
