EUROPE – Pension funds have responded positively to the European Commission’s decision to postpone the implementation of pillar one of the revised IORP Directive.

The Dutch Pensions Federation said it was pleased with the announced additional research into the effects of the new solvency requirements for the Dutch pensions sector, while a spokesman for the €292bn civil service scheme ABP said the decision was “good news”.

“We have been arguing for several years that solvency requirements for insurers are not applicable to Dutch pension funds,” he said, stressing that the Dutch system was sound because of its capital-funded character.

“Stricter buffers would not only lead to higher pension premiums, but also limit our investment options. As we would have to decrease our investment risks, we would have to increase our allocation to government bonds, with yields that would often be exceeded by the rate of inflation.”

Peter Borgdorff, director of the €136bn healthcare scheme PFZW, said he was “very pleased” with the postponement of the solvency rules.

David van As, director of the €37bn building scheme BpfBOUW, also welcomed the delay.

“Being capital-funded, like in the UK and Ireland, the Dutch pensions system should not be treated as the uniformity of most other European systems,” he said.

“Before we introduce European solvency rules, we need more clarity about our new pension contract in real terms, as well as the additional buffer requirements that come with it.”

Recently, pensions supervisor DNB concluded that the estimates in the quantitative impact study (QIS) of European supervisor EIOPA for rights discounts at Dutch schemes were too high.

It said this might come at the expense of pensions accrual, as well as the level of guarantees within the Dutch system.

In 2010, Paul de Krom, then acting minister of Social Affairs, predicted such strict solvency rules would require a contributions increase of 20-30%.

European pensions lawyer Hans van Meerten emphasised that the EC’s decision was merely a delay for more detailed calculations and did not mean solvency proposals would be scrapped.

He conceded that fears over larger financial buffers were premature, “as [the Commission] has never said Solvency II rules would be fully applied to pension funds”.

He added: “The assessed options include scenarios with the certainty level of 97.5% that currently applies to pension funds.”

Meanwhile, German pension funds also welcomed the decision.

Heribert Karch, chairman of the pension fund association aba, said: “It was a good day for occupational pensions in Europe and for the social partnership in the German retirement provision.”

Helmut Aden, chairman of the company pension fund association VFPK, said: “This is good news for employees and those paying contributions, as they can now continue to rely on the second pillar of retirement provision – but it was also a good day for funded retirement provision in general.”

Karch added the commission had “realised late, but it realised” that the rules under Solvency II on capital requirements “would have caused great damage in the occupational pension landscape”.

The largest Pensionskasse in Germany – the BVV, for the banking and finance industry – said “it is the right and very important decision” to leave out pillar one of Solvency II for now, but regretted it was only for now.

“Together, we have to remain vigilant,” Karch said.

But Hermann Aukamp, head of real estate at the doctors’ pension fund NAEV, was more optimistic, saying that, with this decision, one could expect future exceptions to “remain possible if they are justified”.

A BVV spokesperson added that any other decision would have threatened the successful and well-established occupational pension pillar in Germany.

Karch warned against too much euphoria, as there was still work to do to prevent “wrong incentives” created by the proposed financial transaction tax and the draft on a new portability directive, which, among other things, includes shorter vesting periods.

Additionally, Karch would like to see “further work” on pillars two and three of Solvency II to keep the burden on Pensionskassen and Pensionsfonds in Germany “within limits”.

Christian Böhm, board member at PensionsEurope, also welcomed the decision, as the “effects would have been unfathomable, and, given the heterogeneity of occupational pension systems in Europe, they would have been very different from country to country”.