A row has broken out between Austria’s Financial Markets Authority (FMA) and consulting firm Mercer over the implementation of the EU occupational pension directive.
The FMA has officially rejected claims by Mercer manager Kurt Bednar that it dragged its feet in the implementation of the directive, resulting in the “destruction of money” by
“Mr Bednar’s statement is totally unsubstantiated,” said an FMA press statement.
At a recent press conference, Bednar accused the FMA of missing deadlines and lax implementation of the
Institutions for Occupational Retirement Provision directive, which came into force on 23 September. This was coupled with amendments in Austrian law (PKG Amendment), including the replacement of the
existing quantitative capital investment limits with the
‘prudent person principle’.
Linked to this, Bednar was
particularly critical of the lack
of detailed requirements regarding the risk management process of the Pensionskassen, and the qualifications of the people working in the field of risk management.
According to the FMA, “it was neither the legislators’ objective nor the expectation of the
market” that the risk management regulation would be
instituted by 23 September.
Instead, transitional provisions are currently in place until concrete regulations come into play on 30 September 2006. Until then, these “will ensure investment in the best interests of the beneficiaries,” said the statement.
However, Bednar believes that the FMA had enough time to finalise the requirements before 23 September.