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Lines drawn over Solvency II for pension funds

EUROPE – Battle lines are being drawn between supervisors and industry practitioners over a proposal to include pension funds within the insurance industry’s Solvency II framework.

Henrik Bjerre-Nielsen, chairman of the Committee of European Insurance and Pensions Supervisors, reiterated his view that pension funds would come under the regime.

Solvency II, which aims to create a more risk-related solvency model, is to take effect from 2010. CEIOPS has complained in the past that it was taking up a lot of its resources.

“I anticipate that occupational pension funds will be covered by what I call Solvency II-like requirements,” Bjerre-Nielsen said yesterday at an event organised by the European Federation for Retirement Provision.

Funds would have to explain to beneficiaries why they get less security than insurance, he indicated.

Pension industry attendees at the event to mark the EFRP’s 25th anniversary indicated their opposition to the idea in comments to IPE, with some querying insurance regulator Bjerre-Nielsen’s knowledge of the pensions sector.

Dutch MEP Ieke van den Burg told delegates that the European Parliament was “planning to take up this issue”.

She agreed with the EFRP that pension funds were different to insurers. “I think we really should underline the differences,” she said.

She said the Solvency II approach could be applied to the pension fund industry – but not in “completely the same way”.

Earlier this year German financial services regulator BaFin said it wanted to apply parts of the Solvency II regime to certain German pension funds - regardless of whether a future EU directive requires this or not.

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