The results of EIOPA’s stress tests for pension funds were “unsurprising” apart from when compared with GDP, according to Georg Thurnes, chief actuary at Aon Hewitt Germany and a board member at the pension fund association aba.

Thurnes said his only “a-ha moment” when reading the results came when he noted the amounts sponsoring companies would have to make up, relative to GDP, in stress scenarios.

According to the results report, up to 45% of Dutch GDP would be at stake should the most adverse scenario occur.

In the UK, it would be 20%, and in Ireland 30%.

For Germany, the share of GDP would be less than 5%, Thurnes said.

According to EIOPA, “the relatively high impact for the Netherlands is partly driven by the size of its IORP sector and its regulatory framework”.

Not only have a lot of assets accumulated in the system in recent years but Dutch IORPs must also meet a funding requirement amounting to 127% of liabilities, valued on a market-consistent basis.

EIOPA said the results also reflected the fact national valuation methods, national regulatory frameworks and size of IORP sector “differed considerably” among member states.

For Thurnes, these figures show that “total real risks in a country’s pension system can only be assessed if the complete pension system is taken into account”.

He points out that the Netherlands, the UK and Ireland rely less on the first pillar for retirement provision than Germany.

Further, only parts of Germany’s funded pension system are taken into account in EIOPA’s scenarios, as not all of the vehicles in the country are IORPs.

Christian Böhm, chief executive at Austria’s €4.3bn APK pension fund, also expressed concern that the national features of the various pension systems were “not fully taken into account” at the European level.

He said EIOPA’s stress tests were “an attempt to try and fit mismatching systems under one headline”.

“Various countries’ second pillars are as different as they are chiefly because their first-pillar systems are also very different,” he said. 

Another problem is that “solutions are often found to problems that do not exist”.

The cross-border pension question, he said, was a case in point.

“Not everything has to be changed to facilitate cross-border business because there is not that much cross-border business anyway,” he said.

He added that this was not down to pension regulation but mainly to tax questions, “which cannot be resolved using an EIOPA Directive”.