EFRP seeks regulatory slowdown
EUROPE - The directive on Institutions for Occupational Retirement Provisions (IORP) needs more time to deliver results, according to a new survey by the European Federation for Retirement Provision (EFRP).
The study, which reflects opinions of EFRP members gathered from 20 EU member states, echoes the view of EFRP secretary general Chris Verhaegen, who told IPE in an interview last week it was too early for the planned IORP review next year.
Angel Martinez-Aldama, the chairman of the federation, also said today: "At this point in time, there are no signals in the market justifying the commencement of a review procedure."
He added since directive's lengthy implementation has hardly been completed, the IORP directive must be given more time to deliver and unleash its potential.
IORP - the first in a series of major regulatory changes in the insurance and pensions arena over the coming years - is designed to establish a framework for the prudential regulation of occupational pension schemes which operate on a funded basis and are outside the scope of social security schemes.
It puts in place minimum standards to facilitate cross-border operation by pension schemes, meaning member states who have implemented the directive receive uniform governance of occupational pensions throughout the EU.
Presenting the study in Frankfurt today, Chris Verhaegen commented: "The prime objective of this survey was to find out the level of change - real or as perceived by market participants - that this directive had brought about at member state level."
Verhaegen further remarked: "All in all though, 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'."
EFRP said it sees a role for the European Commission in providing guidance where some interpretation of the directive may be required.
Charly McCreevy, European Commissioner for internal market and services conceded in h is closing speech yesterday: "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 conference of the Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS) in Frankfurt also heard yesterday.
Judit Zolnay, a member of the board of the Stabilitas pension funds association in Hungary and head of pension and health business at Axa in Budapest, said a way should be found to "do it better".
Speaking at the conference yesterday, Zolnay said the IORP directive in Hungary would pose competition for the existing occupational pension schemes.
She warned there are social and cultural differences in the various member states, adding: "We have a well-organised pension system, so we feel conflicted to be able to also reach the occupational pensions and compete with the present structure."
Moreover, Zolnay said she sees more challenges than benefits for pan-European pension funds.
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