REGULATION/LEGISLATION

Revisions to IORP applauded in U.K.

A draft report on the proposal for the second iteration of the European pensions directive, known as the Institutions for Occupational Retirement Provision II, has been broadly welcomed by the U.K.’s trade body for occupational pension funds.

“Brian Hayes has taken a very open approach to his work on this directive and his report reflects the input he has received from across the pension industry,” said James Walsh, policy lead for EU and international, at the National Association of Pension Funds, in an e-mail. “He sets out a wide range of welcome simplifications and improvements.”

Mr. Hayes is a member of the European Parliament and on the Committee on Economic and Monetary Affairs. He published the draft report, dated July 22, that will become the basis for discussion and amendment in the European Parliament.

The proposal includes a call against further work at the European Union level on solvency models for European pension funds, such as the development of a holistic balance sheet, which would detail assets and liabilities as a measure of obligations and resources, and, ultimately, of funds’ solvency.

The draft report said: “The further development at (the EU) level of solvency models … is not realistic in practical terms and not effective in terms of costs and benefits, particularly given the diversity of institutions within and across member states. No quantitative capital requirements … should therefore be developed at the union level with regard to (IORP), as they could potentially decrease the willingness of employers to provide occupational pensions.”

Mr. Walsh added in the e-mail that the NAPF welcomes the report’s “strong statement against further development.”