EU pension funds will not be directly tapped for money for the bloc’s pension supervisor under changes to the European financial supervision system agreed by EU lawmakers.
The European Commission had proposed a new funding system for the European supervisory authorities (ESAs), including industry contributions to help fund the three regulators: the European Insurance and Occupational Pensions Authority (EIOPA), the European Securities and Markets Authority and the European Banking Authority.
Instead, the agreement reached by the EU Council and the European Parliament this month “preserves the existing system of contributions”, which currently come partly from the EU budget and partly from national regulators, the Council said in a statement.
Member states and observers can make voluntary contributions.
The agreement also maintains key elements of the ESAs’ current governance structure, with the Council stating that it “ensures a key role for the national competent authorities”.
The Commission had wanted to replace ESAs’ management boards with independent executive boards with full-time staff. Under the current governance model, member states have a seat on the board of supervisors – the main decision-making body – while six members of the board of supervisors sit on the management board.
PensionsEurope, the Brussels-based European pension fund association, had expressed concern that the Commission’s proposal would have sidelined member states’ influence within EIOPA.
Matthies Verstegen, senior policy adviser at the association, told IPE: “Pension funds are still very much embedded in national social and labour law, so it’s good that national supervisors continue to have a strong role in EIOPA’s governance structure.
“We also welcome the fact that EIOPA’s role and powers in overseeing pension funds will broadly remain the same.”
The two other ESAs have been assigned new responsibilities and powers.
Under the agreement, the European Securities and Markets Authority will be given direct supervision powers over third country “critical benchmark administrators” and certain data reporting service providers.
The European Banking Authority, meanwhile, has been granted powers to play a stronger role in relation to money laundering and terrorist financing.
The agreement between the Council and the European Parliament confirms several aspects of the position the Council adopted last month. Barring technical finalisation of the legal text and its expected formal adoption by both EU bodies, it wraps up a lawmaking process that was kickstarted by the Commission two years ago.