Including those of trusts and insurance companies, there are an estimated 7,000 defined benefit plans and an estimated 8,000 defined contribution plans, having an estimated 4.5 million and 0.8 million members respectively.

Finally, however, the rapporteur takes the view that a uniform pan-European system of rules governing the applicable law in the event of divorce and legal separation ought not to be the last word, but that in a second stage rules ought also to be adopted to cover the consequences of divorce (property rights, maintenance, apportionment of pension rights).

36. Notes the current trend away from defined benefit pension systems to defined contribution pension systems and is concerned about the decline in employer contributions that evidently accompanies this trend; emphasises the need for strengthened participation and contribution levels of employees in existing pension schemes in order to ensure adequate retirement income for individuals and emphasises the need for continued adequate contributions from employers, particularly in defined contribution pension schemes; is concerned that the envisaged revision of International Accounting Standard (IAS) 19 regarding employee benefits, as for e ...[+++]xample in the case of the possible abolition of the so-called 'corridor-approach', could entail significant changes to pension systems that need to be carefully assessed, especially as regards possible adverse effects on the attractiveness of defined benefit schemes;

A number of defined benefit pension schemes took advantage of the 1990s bull market to reduce the level of contributions or even take contribution holidays instead of building up their financial reserves. When the inevitable market downturn occurred, some of these reserves were found to be insufficient.

Compared with ‘defined benefit’ arrangements, ‘defined contribution’ arrangements offer much less guarantee of a satisfactory pension.

The purpose of amendment is to highlight the difference between defined contribution and defined benefit schemes. In the former dormant pension rights will be adjusted according to the return on investments, while in the latter the rights will be adjusted according to the chosen method of the Member State; including inflation or wage levels. The amendment also removes the element of ambiguity around the word ‘penalised’.