The European Insurance and Occupational Pensions Authority’s (EIOPA) controversial stress tests for IORPs not only “lack legitimacy”, according to Heribert Karch, chairman of German pension association aba, but will also spread “unease” among German companies.
Even before the final specifications for the stress tests were released today, German stakeholders had been very critical of the proposals.
In a statement, the aba argued that the holistic balance sheet approach was, in principle, a “disproportionate copy/pasting of the Solvency II regulations onto IORPs”.
But the pension fund association also claimed that German companies felt “unease” about having to forward potentially sensitive data to EIOPA.
“Trust is built mainly by positive experience,” the association noted in the paper, suggesting German companies’ relationship with EIOPA has not been entirely positive.
In previous quantitative impact studies, German supervisor BaFin collected the data and sent it to EIOPA only after consolidating it.
Under the scheduled stress tests, however, all participating IORPs will have to forward information directly to EIOPA, including that of individual member companies, some of which are listed.
Further, the aba said the quantitative assessment – to be conducted alongside the stress tests but on a voluntary basis – would yield “much less representative results” for Germany than the first ones in 2012.
Given the considerable efforts made and costs incurred by German IORPs after the 2012 assessment, any “willingness to participate is much lower”, it warned.
The aba also argued that the ramifications of European Central Bank’s monetary policy had been clear, even before the quantitative assessment.
“The victims of the current ECB monetary policy are those that are saving in a funded pillar or have done so in the past,” it said.