European parliamentarians have backed a call from the European Insurance and Occupational Pensions Authority (EIOPA) to raise its own funding through a levy on the industry, noting it could improve the regulator’s functioning.

The Parliament’s committee on economic and monetary affairs (ECON) endorsed the move in a recent report examining the European Commission’s tripartite regulatory system comprising EIOPA, the European Securities and Markets Authority and the European Banking Authority.

It said the European Supervisory Authorities should be granted an independent budget “funded by the contributions from market participants and the Union budget” and also suggested the powers of the regulators’ chairmen – in the case of EIOPA, Gabriel Bernardino – should be enhanced.

Dave Roberts, a senior consultant at Towers Watson in London, noted that while defined benefit (DB) funds would likely see sponsors pay the fees, in the case of defined contribution (DC) schemes the cost would “ultimately” be borne by the member.

Roberts added: “An expanding workload for EIOPA is likely to mean an expanding budget, and ECON’s proposals would make it easier to get pension schemes and insurers to pay for this.”

A large part of EIOPA’s nearly €19m budget is currently met by national supervisors, thereby being indirectly collected from the industry already.

“Even if the idea was only to cut out the middlemen and make pension schemes pay EIOPA directly, it would still give a European regulator a direct claim on pension fund assets for the first time and open the door to higher payments in future.”

When the prospect of an independent levy was first raised by Bernardino in May, he said EIOPA required additional funding to attract the staff to implement the insurance sector’s Solvency II Directive.

Justifying his calls to grant the chairmen greater powers, he added: “To ensure an adequate and consistent level of supervision, for the benefit of consumer protection and financial stability, it is fundamental to strengthen our independent challenging role towards national competent authorities.”