The head of Sweden’s Sparinstitutens Pensionskassa (SPK) pension fund has warned of dangers if the upcoming IORP Directive incorporates a one-size-fits-all set of rules for pension funds in the EU.
Peter Hansson, chief executive at the SEK22bn (€2.5bn) pension fund for Swedish savings institutions, said there was a risk the directive would lead to a “monster reporting system” that would end up making pension funds less efficient for their members.
Hansson said it was not known what the first pillar of the new IORP Directive would eventually look like.
“Generally, the problem is that we do not know,” he said in an interview in German blog Leiter-bAV.de.
The QIS results have revealed big differences in the way individual EU countries have set up their occupation pension systems, he said.
He said it depended on many things, such as local agreements between employer and employee organisations, taxes and state pensions systems, as well as history.
“For that reason,” Hansson said, “we do not know how the Pillar I will be set up, and it’s too early to tell the impact. Anyway, it will be hard to have one system that fits all.”
If such a system is still the intention, then there needs to be a deeper understanding of the impact and the value for the beneficiaries before the directive is designed and implemented, Hansson said.
“Many of the IORPs are quite small and purpose built to generate maximum efficiency to their members,” he said.
“Why should the beneficiaries in an IORP accept reduced efficiency for a one-size-fits-all system?”
Asked about his expectations for pillars II and II of the directive, Hansson said: “The risk is once again that a one-size-fits-all reporting system will add all individual local government requirements to a ‘monster reporting system’ that only reduces the efficiency for the members of the IORPs.”
Pensions are the future income for many people, he said, adding that, as such, they have to have a secure way of delivering expected values at low cost.