European Parliament passes PRIPs with minor changes
A European regulation aiming for increased transparency for investment products has been passed by the European Parliament, but its passage has not allayed fears it could still be applied to some second-pillar pension funds.
German pension fund association aba previously raised concerns over a revised draft for the Packaged Retail Investment Products (PRIPs) regulation, which could have required second-pillar pension vehicles to issue a Key Investment Document (KID).
The passed regulation saw only one minor change incorporated into the draft, within the paragraph specifying the criteria allowing for pension product exclusion.
The regulation now only applies to pension provision if the employee has no choice as to the provider.
A previous draft of the regulation said it would capture pension products “where the employer or employee has no choice as to the pension product or provider”.
The revised draft has seen the words “employer” and “pension product” removed.
Klaus Stiefermann, managing director at aba, told IPE: “There has not been a genuine improvement for us.”
The regulation will now be the subject of trialogue discussions together with the European Council and the Commission.
Since the aba first raised its concerns, debates have been ongoing as to how to read the new regulation correctly.
Some had argued occupational pensions would be excluded, with only third-pillar pensions forced to meet the above-mentioned requirements.
European Insurance and Occupational Pensions Authority chairman Gabriel Bernardino recently told IPE he strongly recommended an obligation for pension funds, especially DC plans, to hand out a KID to their members.
He added that whether further information disclosure requirements for pensions were introduced “in one or the other piece of legislation” was not his concern.