EUROPE - The Committee of European Insurance and Occupational Pension Supervisors has said that the introduction of new accounting standards for pensions will increase liabilities and introduce volatility.
“The pension liabilities will in most cases be increased, and volatility may be introduced as a result of use of market values,” CEIOPS said.
The remarks come in a consultation paper called ‘Implications of IAS/IFRS Introduction for the Prudential Supervision of Insurance Undertakings’.
It also said: “Although current pension approaches vary widely across Europe, it is commonly accepted that the new rules will better describe the full future cost of pension payments than the current systems in the EU.”
The committee added that supervisors should make sure that a net asset resulting from the valuation of pension assets and liabilities is deducted from the available solvency margin – “to the extent that it does not entitle to a reimbursement from the pension regime or to a reduction of future contributions”.
Meanwhile, it has also emerged that the committee is understaffed in the face of a dramatically increasing workload.
“The secretariat is still clearly understaffed in view of the current workload as well as the size of the other Level 3 committees,” said CEOIPS chairman Henrik Bjerre-Nielsen, referring to the securities committee CESR and banking group CEBS.
“Furthermore, the demand for new and committing activities at secretariat level is dramatically increasing,” Bjerre-Nielsen wrote in a letter to CEIOPS members and observers.
“Considering the strategic role of the secretariat in supporting members' work within the committee and in allowing CEIOPS itself to fulfil its tasks, a significant increase of secretariat staff members appears to be necessary and urgent.”
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