A simpler set of products from the pensions industry could lead to less stringent regulation, said Gabriel Bernardino, chairman of the European Insurance and Occupational Pensions Authority.
Addressing delegates at the annual National Association of Pension Funds conference, held in Liverpool, England, Mr. Bernardino said the authority's first priority should be “to support private pensions,” and that to achieve that, any regulatory framework must deliver on three "fundamental objectives: enhanced sustainability, strong governance and full transparency."
However, Mr. Bernardino was challenged by a delegate and forced to defend his requirement for both strong governance and full transparency. The delegate said there would be duplication across these two elements, and increased costs in implementation.
“I'm not mentioning in particular the U.K. ... (but there are) a number of elements in terms of governance that are not really up to the standards,” said Mr. Bernardino. “A lot of pension schemes are governed by people who are not specifically experts.” He said there can be a number of conflicts of interest, “which are not managed properly, so I'm sorry to say that is not what we see in reality. Even with best governance possible, full transparency needs to be there,” said Mr. Bernardino.
“Many of these regulations that have been introduced in the financial sector came as a response to more complexity — to more complexity also in products. That is what I get from the people I talk to — please provide us more simple, standardized products. … We are prepared to investigate the ways to go with (a) less strict regulatory environment if you guys in the industry can provide more simple products,” he said.