GERMANY/EUROPE - aba, the German pension vehicle federation, has warned pension providers could still see an impact from Solvency II through the IORP Directive, even if the European Commission makes no explicit link.

In a letter addressed to several MEPs, the aba noted the IORP directive makes reference to the current insurance regime Solvency I in a paragraph about the calculation of the minimum level of equity capital for pension vehicles.

"The passing of Solvency II might therefore automatically link the IORP directive to Solvency II," pointed out Klaus Stiefermann, head of aba.

"An amendmend to the current Solvency II draft is therefore necessary to ensure all Solvency I references in the IORP directive remain unchanged and that the new regulations under Solvency II are not applied to occupational pension vehicles."

In its appeal to MEPs, the federation explained the new solvency regime developed for insurers would mean an "unbearable burden" for pension providers and employers.

"The IORP directive already provides sufficient protection for pension fund members and we do not see the need to create unnecessary and expensive additional consumer protection in occupation pension vehicles by applying Solvency II," said Stiefermann.

The European Federation of Retirement Provision (EFRP) is among the critics of Solvency II for the pension sector also spoke out once again recently in a paper entitled IORP Directive - securing  workplace pensions.

In its paper, EFRP noted "the solvency regime of IORPs will be subject to further scrutiny as part of the EU Commission evaluation of the IORP directive in the near future".

"Such a process should not be rushed but be properly prepared to avoid poor policy decisions which affect the future of workplace pensions," said EFRP.

It is only recently critics of Solvency II-type requirements on pensions gained the support of the European Commission's committee of European insurance and occupational pensions supervisors (CEIOPS), as it recently stated Solvency II for pension funds was "not an appropriate course to pursue". (See earlier IPE story: CEIOPS change of heart on Solvency II)

In its latest paper - which included suggestions for the EU consultation on solvency regimes among European occupational pension vehicles - CEIOPS also questioned the need for complete harmonisation of regulatory regimes in the EU pension sector.

While CEIOPS found "very diverse" regulatory regimes it suggested "this does not necessarily imply substantially different security levels provided to pension beneficiaries between member states" and added "national pension supervision frameworks do not have to be identical".

"Suggestions for possible changes to the current EU pension regulatory system need to be based on an analysis of the costs and benefits of such changes," CEIOPS concluded.

If you have any comments you would like to add to this or any other story, contact Julie Henderson on + 44 (0)20 7261 4602 or email julie.henderson@ipe.com

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