EIOPA criticised over pension fund data consultation
The European Insurance and Occupational Pensions Authority (EIOPA) should focus on gathering pension fund data from national regulators and not the funds themselves, according to trade bodies.
EIOPA yesterday published a consultation paper regarding the collection of information about pension funds on a quarterly and annual basis. It argued that the initiative would “increase efficiency” and “strengthen the monitoring and analysis of the European occupational pensions sector”.
The European Central Bank has also published a similar consultation on statistical reporting requirements, in partnership with EIOPA.
However, trade bodies criticised the potential burden EIOPA’s proposals would place on pension schemes and the additional costs involved.
James Walsh, policy lead for engagement, EU and regulation at the UK’s Pensions and Lifetime Savings Association, said schemes already provided “extensive” data reports to national regulators. “EIOPA should focus on gathering information from national regulators, rather than imposing new reporting requirements on individual schemes,” he said.
Walsh added: “These proposals would introduce a completely new requirement for schemes with over €1bn of assets to send a detailed annual report to EIOPA, plus a quarterly requirement to report to EIOPA on their investments. This is a very significant extra reporting requirement that would add to pension schemes’ costs – but without improving protection for members.”
PensionsEurope, the continent-wide trade body, voiced support for a single framework to aid EIOPA’s and the ECB’s information gathering, but reiterated its concern that the requirements would be “too burdensome and costly” for pension schemes.
Matti Leppälä, secretary general and CEO of PensionsEurope, said: “Statistical reporting and collecting information always contain costs for pension funds, so it should be very carefully considered which information is really relevant and needed, and how often they should be reported. Pension funds should not be required to pay high fees to third parties in order to be able to provide the required information to the ECB and EIOPA.
“The ECB should also take the full advantage of its current statistical reporting requirements on other non-monetary financial corporations, so that pension funds should not have to provide the same data to the ECB that it already has from other sources.”
EIOPA regularly requests data from pension schemes across the EU for various bodies and reports, such as the bi-annual Financial Stability Report, the annual Market Developments Report on occupational pensions, the annual Consumer Trends Report, the pension register, the pension database, and ad-hoc surveys. It wants to streamline this work through a single reporting framework.
Under the proposals, the annual request would involve balance sheet information, lists of assets and investment funds, funding ratios, membership data, and statistics regarding contributions. The request would apply to EU-based IORPs with more than €1bn, although EIOPA said countries would “at the minimum” have to supply data on their top five biggest pension funds over €100m.
The quarterly request would focus on investment, EIOPA said, and would apply to a “very limited” number of funds. The EIOPA consultation also outlined an intention to supply data to Eurostat and the OECD through the framework.
Outlining its consultation, the ECB said it wanted to “plug a data gap” in order to “achieve a comprehensive understanding of cash flows and risks associated with pension obligations”.
Improved data reporting would increase transparency at a time when several countries were pushing through reforms, the ECB added, and would contribute to “a stronger information base for policy decision-making”.
EIOPA said in a statement that it had worked with the ECB to “minimise the burden on the pensions industry”.
Gabriel Bernardino, chairman of EIOPA, added: “There is a need for better, comparable and relevant information regarding occupational pensions in Europe which is decisive to take informed policy decisions. I am confident that EIOPA’s proposal will minimise the reporting burden, increase efficiency in the reporting requirements for pension funds and further strengthen EIOPA’s monitoring and analysis of the European occupational pensions market.”
EIOPA’s consultation closes on 27 October, while the ECB’s consultation deadline is 29 September.