ASSET OWNERS

EIOPA renews consideration of solvency rules for pension funds

The European Insurance and Occupational Pensions Authority has published a consultation paper on the potential for applying solvency rules to pension funds, in a move that has attracted concern from the U.K. pensions industry.

The paper focuses largely on the concept of requiring pension funds to draw up a “holistic balance sheet” to detail assets and liabilities as a measure of obligations and resources, and, ultimately, of funds’ solvency.

European pension funds had been facing the potential for requirements similar to Solvency II insurance regulations to be applied to their funds.

Last year, the European Commission delayed talk of plans for solvency-based funding of pension funds, but the new consultation paper has led to renewed concern.

“We are disappointed that EIOPA has chosen to press ahead with this project,” said James Walsh, policy lead, EU and international, at the National Association of Pension Funds, in a statement published Tuesday. “The European Commission put the plan for solvency-based funding of pension schemes on the backburner last year due to the serious concerns raised by a wide range of employers, trade unions and governments across Europe. It is not clear why EIOPA is still consulting on it.”

However, Mr. Walsh noted that, within the consultation, EIOPA appears to have taken previous concerns into account. “The shift away from a one-size-fits-all system and toward more flexible implementation at national level is an important step in the right direction, but we still think there are more pressing priorities for EU policy makers to address.”

The 156-page consultation paper, Further Work on Solvency of IORPs (Institutions for Occupational Retirement Provision), is available on EIOPA’s website website. Comments are due by Jan. 13. EIOPA said in the paper that it will then consider the feedback, and expects to publish draft technical specifications early next year for a quantitative impact assessment. It will then develop advice to the EC.