Industry associations divided on White Paper on pensions
EUROPE - Pension figures have expressed mixed views on the White Paper on pensions, released yesterday by the European Commission, with some reiterating concerns over plans to revise the IORP directive.
The inclusion of a new passage on Solvency II in the long-awaited final version of the White Paper caught many in the industry by surprise.
In Article 11 of the White Paper, the Commission says it will present a legislative proposal to review the IORP directive this year.
"The aim of the review," it adds, "is to maintain a level playing field with Solvency II and promote more cross-border activity in this field and to help improve overall pension provision in the EU."
But James Walsh, senior policy adviser at the UK National Association of Pension Funds (NAPF), told IPE: "There was no surprise to us that the White Paper would make a relatively brief mention to the revised IORP directive, as all through the review of that directive, it has been explicit that all the objectives were to bring the IORP directive more into line with Solvency II.
"If we want to judge the state of the Commission's thinking on the IORP directive, we should look at the IORP directive directly, rather than looking at the White Paper."
However, Walsh reiterated the NAPF's concerns over the revised IORP directive, characterising the position taken by the European Insurance and Occupational Pensions Authority (EIOPA) in its advice to the Commission as "irrational".
"We welcome the fact EIOPA is now making it clear that its advice on the funding aspects is conditional on the quantitative impact studies," he said.
"We are, however, very disappointed that it's still pressing ahead with the holistic balance sheet approach despite the fact its advice now acknowledges it could be potentially damaging for pensions and the wider economy."
In Germany, however, the association of company pension schemes (VFPK) took a somewhat different view, criticising the Commission for offering a "pan-European solution where there was no pan-European problem".
The association welcomed the While Paper's recommendations on how to increase the coverage of occupational schemes, but it warned that German companies would be unable to meet capital requirements based Solvency II.
Managing director Helmut Aden said the additional regulatory burden could only hurt the "proven" German pensions system that had survived repeated financial downturns.
"We have existed for more than 100 years," he said. "The repeated crises witnessed over the last several decades did not require us to be saved by anyone, as we invest securely."
Aden added that, the due to Penisonskassen being enshrined in national labour law, it did not make sense to attempt to introduce a uniform regulatory approach.
"We do not have a pan-European problem, therefore a pan-European solution is uncalled for," he said.
The UK's Confederation of British Industry (CBI) echoed his concerns.
It argued that the White Paper should focus on the promotion of sustainable and affordable pension schemes and not on Solvency II measures within the IORP directive.
Neil Carberry, director for employment, said: "Our concerns with the IORP (pensions) directive remain. We are unconvinced Commissioner Barnier has moved on from his proposal of applying Solvency II-style regulations to pensions, which would be hugely damaging to the economy and job creation.
"The IORP directive must place a greater emphasis on growth to better complement the overall direction set out by the White Paper, putting pension affordability at the heart of the debate."
Walsh told IPE the NAPF would pursue its efforts to provide the "best possible input and evidence" into those impact assessment exercises, making submissions to EIOPA and the Commission.