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The EFRP has called on the EP and the Council of EU to dismiss the Proposal regarding Financial Transaction Tax
10.02.2012

EFRP Warns of Disproportionate Impact on Pension Funds of Financial Transaction Tax

7 February 2012 (PLANSPONSOREurope.com) – The proposed European Financial Transaction Tax would “disproportionately” impact pension funds and IORPs, according to the European Federation for Retirement Provision (EFRP).
The European Parliament and the Council of the European Union are discussing a Proposal from the European Commission for a Directive on a common system of financial transaction tax (FTT), setting out a common tax on all transactions, carried out by EU-based financial institutions.

In outlining its position paper the EFRP predicts:

• transactions would be made more expensive therefore, net returns would be lower,
• the investment strategy may turn to be less efficient
• less liquidity would be circulating on the market.

The EFRP has called on the European Parliament and the Council of the European Union to dismiss the Proposal, adding that if it is introduced, pension funds, IORPs and financial institutions managing assets on their behalf should be exempted from its application.

Patrick Burke, EFRP Chairman, said: “The EFRP understands the reasons underlying the Proposal for a Financial Transaction Tax. However, if the Proposal was approved in its current form, pension funds, IORPs and companies managing assets on their behalf would be deeply affected by this tax. The consequent increase of costs would be born by beneficiaries, in terms of reduced benefits: current and future pensioners would be requested to pay even more the costs of this financial crisis, which has already affected their income.”
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