Industry remains uncertain about single market for second pillar, says Leppälä
EUROPE – PensionsEurope has questioned the need for a single market for second pillar pension provision in Europe, suggesting that the approach would be better suited only for voluntary pension savings through the third pillar.
In his closing remarks at the European pension fund association’s annual conference in Frankfurt, the organisation’s secretary general Matti Leppälä said that the industry was “not sure whether a single market is a good approach for the second pillar, maybe only for the third pillar”.
The sentiment was echoed by Rebekah Smith, senior social advisor at the European employer association BusinessEurope. During a panel discussion, Smith said that while the group was in favour of a single market for occupational pensions, it was “extremely complicated and difficult to achieve”.
And Cornelia Schmid from the German pension fund association aba added that the industry needed “more time for a single market” in occupational pensions to be implemented.
Further, she reiterated demands for a separate regulatory framework for occupational pensions, with no overlap between Solvency II regulations for insurers or those for retail products, such as PRIPs.
Leppälä said he had told the European Commission that his association “did not see workplace pensions as a consumer issue” – although he added that defined contribution (DC) funds, if not defined benefit (DB) funds, could fall into the consumer category.
Addressing the European Insurance and Occupational Pensions Authority (EIOPA), he added that PensionsEurope was “not as convinced” as the regulator that the results of the first quantitative impact study for IORP meant that a harmonization of the regulatory framework was possible.
“On the contrary, the results were very inconclusive, the results too far from each other and it was based too much on assumptions,” Leppälä added.
Earlier during the conference Justin Wray, head of policy at EIOPA, said that if asked if a single regulatory framework for IORPs was possible, “the tentative answer, judging by the results of the QIS study, was ‘yes’”.
He pointed out the holistic balance sheet approach was “not seeking to impose a one-size-fits-all framework”.
“HBS precisely recognizes the differences in IORPs in Europe and asks whether it is possible on a common basis to measure the differences in the pension plans including adjustment and protection mechanisms.