GERMANY - German pension fund association AbA has questioned the European Commission's (EC) level of support for introducing Solvency II, highlighting that a recent consultation on the changes to the IORP directive only saw responses from 11 of the single market's 27 members.
Speaking ahead of tomorrow's public hearing in Brussels on the IORP directive review, chairman Heribert Karch warned that the introduction of new solvency capital requirements would only serve to drain funds from stimulus measures during a period of economic uncertainty.
Karch argued that only time would tell if Solvency II was beneficial for insurance companies, but rejected its application on German occupational pension funds (bAV) outright.
"In light of the security mechanisms in place for the second pillar, new capital requirements in line with Solvency II would only serve to increase the cost of providing occupational pensions," Karch said.
"It would only lead to a Europe-wide pooling of hundreds of billions in dead capital, resulting in the assets no longer being available for vital stimulus packages."
Karch said that in AbA's opinion, the recent Call for Advice by the European Insurance and Occupational Pensions Authority (EIOPA) had demonstrated that only France supported the introduction of Solvency II, as well as insurance companies - with the European insurance and reinsurance federation repeatedly calling for a level playing field.
"The focus of future discussions should be the interests of employers and pension fund members, rather than those in the insurance industry," Karch said.
He added that all submissions only represented the interests of 11 of the 27 single market's member states, making him question the "point" of any harmonisation proposed by the Commission.
Referring to the recently published Commission White Paper on Pensions, Karch said that it had recognised the importance of the "cost-efficient expansion" of the occupational pension sector.
He argued that if the Commission wanted to see this goal achieved, it must not install "unnecessary" cost barriers.