Last month's conference of the Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS) in Frankfurt saw supervisors parading the widely criticised Solvency II proposals like a carrot on a stick in front of insurers and pension funds alike.

But the upbeat messages and reassurances on the proposed solvency requirements - as delivered by the likes of Klaas Knot of the Dutch regulator DNB, Tony Hobman of the UK's Pension Regulator, and Thomas Steffen, the committee's re-elected chairman and director of German regulator BaFin - could not appease the European Federation of Retirement Provision (EFRP), which continues to lobby against the implementation of the new risk-related solvency model for pension funds.

Chris Verhaegen, secretary-general of the federation, voiced strong concerns about the proposal for a Solvency II directive and the possible implications for institutions of occupational retirement provision (IORPs).

Moreover, the EFRP argues that IORPs, subject to their own directive which was only fully implemented in July this year, are not in need of a review of their prudential framework along with the insurers.

The federation believes the directive already contains most of the principles now proposed for insurers under Solvency II.

Jaap Maassen, director of pensions and member of the board at the Dutch pension fund ABP, and chairman of the board of directors at EFRP, recently referred to the directive as a ‘devil in disguise' for pension funds. And even though Klaas Knot and Thomas Steffen were adamant that the regime would not, if at all, be applied to pension funds "lock, stock and barrel", Maassen was not so sure.

He has given a less than warm welcome to the proposals and has not been shy in voicing his objections on previous occasions. During the conference he again outlined that applying Solvency II to pension funds, in whatever shape or form, would deliver unnecessary extra costs.

Charlie McCreevy, the European commissioner for internal markets and services, also speaking at the conference, conceded that further work is needed before EU member states can commit themselves to the Solvency II regime.

In his closing speech at the conference McCreevy said: "It was agreed with member states in 2006 that the issue of a possible extension of some aspects of Solvency II to pension funds would not be tackled directly under the Solvency II proposal, but be examined in the context of a review of the [IORP] Directive in 2008."

He added that CEIOPS has already begun examining the existing solvency rules for pension funds, while the commission will send a specific call for advice to the committee early next year.

"It is only after having produced this fact-finding exercise that we will be able to better understand how solvency rules operate in the area of pension funds," he said, adding: "I believe that further work is needed here before we can commit ourselves to any specific regime."

Asked who takes the decisions in Brussels, Thomas Steffen reassured journalists during a separate press conference that CEIOPS just gives advice to the European Commission. Still, he was proud to admit, the Commission takes CEIOPS' advice in around 70% of the cases.

The second topic of the day was the IORP directive and plans for a possible review. The EC plans to review the directive next year, although the
EFRP thinks this is too soon, suggesting that it sees a role for the European Commission in providing guidance where some interpretation of the directive may be required.

Verhaegen remarked: "All in all, the impact of the IORP directive was judged as positive. Even some beneficial effects on pensions policy were reported: the directive sparked debate on pensions policy and put it in a less catastrophic context than the rhetoric about the ‘pensions time bomb'."

Charlie McCreevy, conceded in his closing speech: "Launching cross-border business remains difficult because of the existence of local social and labour law requirements. It is too early to tell whether the directive has delivered its full potential in this respect."

However, the IORP directive is not universally popular, as IORPs are expected to be used for defined contribution schemes, delegates at the CEIOPS conference also heard.