New European pension rules could lead to 180,000 UK jobs being lost and would hit businesses with £350 billion of added costs, the Confederation of British Industry (CBI) has warned.
The Daily Telegraph reported that research commissioned by the CBI showed Solvency II would force employers to divert hundreds of billions of pounds into their final salary pension schemes to reduce their deficits.
According to the paper the CBI argued the reforms would cost firms £350 billion to fund, meaning they would have to cut investment in other areas of their business by 5.2% a year by the mid-2020s.
The CBI said GDP would fall by 2.5% a year over the first 15 to 20 years of the new regime, while employment would fall by 0.5%, or 180,000 people.
The Telegraph reported the European Commission was planning to publish draft legislation on Solvency II by early summer 2013. This will then go through an impact assessment before going before the EU Parliament.