Controversial new pension rules proposed by the EU could lead to the loss of 180,000 UK jobs, according to the Confederation of British Industry (CBI).
As part of the EU’s wider Solvency II process, employers would be required to divert large amounts of money into their final salary pensions schemes to reduce their deficit. The aim of the policy is to prevent a repeat of the 2008 financial crisis.
Diverting funds into low risk products is safer, but produces a much lower yield, strengthening the security of pensions but requiring much larger sums of investment.
The CBI argue that the proposals would cost jobs by putting additional strain on employers and cut ‘deeply into our long-term growth and competitiveness’. They claim that introducing the scheme in the next two years would required £350 billion of funding forcing businesses to cut investment by 5.2% per year and diverting money away from infrastructure.
Read more about Solvency II in the news.