EUROPE – The European Commission's ability to apply results from the IORP Directive's first impact study to other pension funds has been questioned by the European Association of Paritarian Institutions (AEIP), which said the representative nature of the results was "very limited".
In its position paper on the quantitative impact study (QIS) conducted late last year, the association also called on the European Insurance and Occupational Pensions Authority (EIOPA) to clarify the methodology it would use to compare the results and urged the regulator to detail how it would treat the volume of responses received in December.
The Frankfurt-based authority, which is in charge of collecting the data for the exercise, set the deadline for the consultation process at 17 December 2012.
The consultation on the first QIS aimed to assess the financial impact of different sets of options for the valuation of the holistic balance sheet (HBS) and the calculation of capital requirements.
It also considered the quantification of the security and benefit adjustment mechanisms existing in different EU member states.
According to EIOPA, nine European countries where defined benefit plans are most prevalent volunteered to participate in the study: Belgium, France, Germany, Ireland, the Netherlands, Norway, Portugal, Sweden and the UK.
In its position paper, the AEIP argued that, since only eight countries performed the exercise – and within that "only a few big pensions funds had the resources and knowledge to perform the calculations" – the results were "limited".
Additionally, the association stressed that the model presented in the QIS required each IORP to make "too many" subjective assumptions, even for the calculation of liabilities.
"This might not only pose issues in the comparability of results between pension funds based in the same country, but also at European level," it said.
"Moreover, the value of a particular entry may differ across EU countries according to local social and labour laws.
"As a consequence," it said, "the comparability of the different values is hampered, and the same value might lead to different prudential conclusions."
The AEIP also voiced concerns about the fact that national supervisor authorities were required by EIOPA to project the results collected at national level.
"AEIP questions whether such a process would provide data that [is] actually meaningful for further evaluation on the viability of the HBS tool," it said.