Happy in the hot seat
Jeremy Woolfe asks Gabriel Bernardino, the chairman of the European Insurance and Occupational Pensions Authority, about the challenges he faces stuck in the crossfire of the conflicting interests of the European pensions industry
Love him or hate him, you might think that the strikingly contrasting assessments of the chairman of the European Insurance and Occupational Pensions Authority could place unbearable pressures on the man in the hot seat. But they don’t.
Despite being caught in the crossfire from conflicting interest groups, Gabriel Bernardino seems relaxed.
What makes the 48-year-old Portuguese tick? Having a family background in farming and a penchant for applied mathematics, how does his character fit in with the immense challenges faced by the authority? After all, they are, arguably, more severe than those of the other two authorities that advise the EU political sector on legislative matters, concerning banking and securities.
What is his motivation, and how strong is his resilience when faced with reporting on technical, legislative and economic issues? These are matters that already get ceaseless attention in the press.
As for his background, Bernardino was born in Bombarral, less than an hour’s drive north of Lisbon. Later, at the Universidade Nova de Lisboa, he remembers with enthusiasm studying on the first mathematics applied to economics course in Portugal.
“That gave me a sound vision of how mathematics is relevant to pensions and insurance, in other words how maths is applied to the real world,” he says. He later took a Master’s in statistics, applied in economics, and also some actuarial studies.
Curiously, his mastery of English came from watching subtitled films, “which trains your ear”, he says. “I have a passion for films.” His tastes include films noirs from the 1940s and 1950s, such as Double Indemnity, by Billy Wilder, on an insurance theme.
Bernardino’s initial entry to the practical world of European pensions goes back to 1989, when, in his mid 20s, he joined the Instituo de Seguros de Portugal (ISP), the insurance-and pension-fund supervisor.
He became involved in European discussions when the first attempt was made to initiate a pension Directive. The present occupational pension directive came later, in 2003, which he describes now as “important” but “a minimum step in terms of principles”.
Now involved in advising revisions to the Directive, he would be conscious that the European Commission faces contrasting interests. On the one side, employers fear increased funding to cope with rising liabilities. Also, there is the insurance sector, with its “level playing field” position. Last, but not least, are the future beneficiaries.
Noting that the competing interests can be poles apart, he adds: “The clear duty of all regulators and supervisors is to listen and understand all sides, and to defend the most important. This is to arrive at regulation and supervision that can foster stability, and meet the promises from insurance companies and pension funds.”
Bernardino explains that it would be easy to say that everything is in good health. “But, my responsibility is to signal that we have a problem. In many countries, we are now seeing the consequences of many years when nothing was done to ensure the sustainability of the first pillar. Hence, in some countries, there is a massive downgrading of pensions.”
Furthermore, in the second pillar, some systems are in distress. As a result, there is a need for a more risk-based approach, with more reliable and realistic evaluation, enhanced transparency, and improved governance, he says.
This comes from someone who appears to see the big picture. He shows no fear of lobbies, but is motivated to seek practical remedies. Some might call him a technocrat. He probably would not object to the label.
One suggestion he flags up is a possible call for stronger institutional lobbying to boost representation of consumer interests. He would favour bodies devoted specifically to promoting them, both for the pension and insurance sectors.
Recently, Bernardino called for EIOPA to have greater operational independence, and to be funded by an industry levy rather than an EU direct grant. Speaking in Brussels, he said the authority had achieved “important results in a very challenging environment”.
On the personal and family side of life, what does he like and dislike about living in Frankfurt? “Everything works. Good transport, infrastructure and so on.” But he misses the smell of the sea.
His two children attend the European school’s English language section, and he can sometimes walk to work. As a proud Portuguese, he regularly visits the family farm in Portugal. It grows pears, mainly for export, to the UK, Ireland and Brazil.
Back to office life, in a cylindrical green glass tower near Frankfurt railway station, his staff represents the EU’s 27 member states. Recruitment sources are various, such as from supervisory authorities, consultancies and commerce. Most newcomers are around 30-35 years old. The staff level, now around 90, is planned to increase to 140, although this expansion is currently subject to budget clearance.
EIOPA staff members are encouraged to balance working and family life. Personally, Bernardino himself makes the point of nearly always trying to be home for (a late) family dinner.