The German pension fund association (aba) has criticised the fact an ECON report on Key Information Documents (KID) for investment products – also known as PRIPs regulation – will include occupational pension plans within its scope.
In July 2012, the commission published a draft for the PRIPs regulation that excluded all occupational pension schemes.
Only a few months later, however, a number of lobby groups vowed to fight the proposal.
The ECON Committee of the European Parliament has now put forward an amended draft of the regulation that could include most of the occupational pension vehicles after all – particularly in Germany – according to Klaus Stiefermann, managing director at the aba.
He told IPE the new proposal “shocked and surprised” many in the industry, as “nobody thought to track the PRIPS negotiations any further, especially as the EMPL committee (dealing with the occupational pension sector) was not involved”.
In the new draft of the proposed regulation, occupational pension schemes and individual pension products are only excluded provided that a “financial contribution from the employer is required by national law and where the employer or employee has no choice as to the pension product or provider”.
According to the aba’s interpretation, this would include all German occupational pension plans, as contributions are neither mandatory nor are employers limited in their choice of provider.
The ECON report states: “Investment products with the purpose of accumulating savings for individual pensions should remain in scope because they often compete with the other products under this regulation and are distributed in a similar way to the retail investor.”
The amended report is to be voted on in two weeks’ time, on 21 November, but the deadline for feedback on the proposal is 13 November.
Should the proposal go through without alteration, some pension funds would have to draw up KID similar to the ones given to private investors when buying a retail investment product.
German Green MP Sven Giegold – also a founding member of consumer lobby group Finance Watch, which aims to improve the regulation of financial products – is responsible for bringing the amendments forward.
While the aba said it was unopposed to additional reporting requirements or member information, it argued that the inclusion of KID-type requirements in the PRIPS regulation “made no sense”.
“We are expecting the draft of the IORP II Directive to be published by the end of the year, and this will include additional reporting requirements anyway,” Stiefermann said.
He suggested the PRIPs Regulation and the IORP II Directive might ultimately be considered incompatible and even “collide”, and questioned whether all members of the ECON Committee who voted in favour of the changes had been fully aware of their scope.
For more on Key Investor Documents, see the Letter from Brussels column in IPE magazine’s December issue