A recent ruling by Britain's Inland Revenue just threw an obstacle into the path of more efficient private pension schemes in the European Union.
AMS Management Systems Inc. is seeking a ruling from Britain's Inland Revenue on the taxation of contributions to a pension plan domiciled in the Netherlands.
But a group of benefit consultants and multinational companies awaiting the ruling may be in for some bad news, according to a Pensions & Investments report.
Inland Revenue ruled recently against an unidentified multinational company that made a similar application.
That's troubling. The European Union faces soaring unfunded liabilities in government-provided social security systems, and ought to do whatever is reasonable to encourage cost-effective pan-European private pension plans for multinationals operating in its member countries.
Fortunately. the European Parliament has been moving to facilitate pan-European pensions. Perhaps the tax-harmonization efforts of the European Union will lead to the eventual reversal of Inland Revenue's ruling.
But a consultant was quoted in P&I as saying, the British authority "will delay the whole process of moving to pan-Euro pensions even further."
Let's hope any delay is very short. Time is not on the side of the European nations and their state-run retirement systems.