European Employee Benefits and Pensions, Issue Number 10
This newsletter provides an update on employee benefit developments in several European countries. We hope that you find it informative.
Belgium: The Removal of the Distinction Between Blue and White Collar Workers – Part 2
As explained in our Autumn 2013 Newsletter, Belgium is one of the last European countries where a discriminatory distinction has existed between blue and white collar workers.
The process for removing these distinctions began on January 1, 2014 but the employers' organizations and representatives are still anxious to see what the financial impact of this harmonization process will be, especially in sectors employing large numbers of blue collar workers, such as the textile and automotive industries. One of the main areas of concern is the treatment of occupational pension schemes and, in particular, the fact that premiums and contributions that are paid to the occupational pension schemes are substantially higher for white collar workers than for blue collar workers.
France: New Union Agreement on Unemployment Benefits
On March 22, 2014, employer and employee unions agreed to a new agreement on unemployment benefits (Accord National Interprofessionnel) which must be approved by the French government before becoming effective. This agreement impacts the extent to which an employee's unemployment benefits are accumulated when starting new employment and also extends the period of time before which an employee is able to receive unemployment benefits if he/she received a termination payment which exceeded the amount legally required to be paid on termination.
France: 2014 Finance Bill
At the end of December 2013, the French government enacted the 2014 Finance Bill, which provides for a 50% employer-paid tax on compensation paid to employees which exceeds 1 million EUR during 2013 and 2014. This tax replaces the former 75% tax previously introduced by the government but declared unconstitutional by the French Constitutional Court (Conseil Constitutionnel).
Germany: New Financial Institution Remuneration Ordinance
Effective January 1, 2014, Germany introduced a new Institution Remuneration Ordinance (Institutsvergütungsverordnung or InstitutsVergV) which introduces new restrictions on remuneration. The new ordinance applies to all major financial institutions and generally aims at structuring the remuneration of their employees to discourage such employees from taking excessive financial risks in order to achieve higher remuneration.
Italy: Voluntary Disclosure of Assets Held Abroad by Italian Tax Residents
Article 1 of Law Decree no. 4 of January 24, 2014 (the "Decree") introduced a voluntary disclosure procedure (the "Procedure") with the purpose of promoting the disclosure of unreported assets held abroad for tax purposes.
Spain: Social Security Pension Revisions
The financial situation of the Spanish Social Security system is one of the primary concerns in Spain. The current pension system is unsustainable and has been modified twice in recent years to help alleviate the concerns.
United Kingdom: Pension Contributions Following an Asset Sale
As explained in our Spring 2013 Newsletter, in light of the introduction of the automatic enrolment of eligible employees into a pension plan, legislation was proposed to change the level of employer pension contributions a buyer would have to make in respect of an employee transferred to it under an asset transfer, where that employee had been a member of an occupational pension plan with the seller.
United Kingdom: Stock Plan Changes
2014 sees the introduction of important changes to the administration and taxation of H.M. Revenue & Customs ("HMRC") approved and unapproved UK share schemes.
