European regulation that would introduce Key Information Documents (KIDs) for investment products should be revised to remove second and third-pillar pensions from its scope, PensionsEurope has said.
The lobby group called for a “full and unambiguous exemption” for pension funds from the regulation proposed for packaged retail investment products (PRIPS), arguing that it would be wrong to classify occupational pension funds as a financial product.
Concerns that occupational funds would be forced to publish KIDs were raised by the German pension fund association (aba) last year, after the European Parliament’s Economic and Monetary Affairs Committee (ECON) revised the draft regulation first published in 2012 – a draft that made clear occupational funds should be excluded.
PensionsEurope said any information document aimed at pension fund members should provide “tailor-made and comprehensive” information, and argued that the emphasis solely on information regarding investments would be insufficient.
“Therefore, it should be clear that, although we fully support the provision of transparent and clear information on occupational pensions, the proposed PRIPS regulation is not the suitable vehicle to achieve this,” the organisation’s position paper said.
It further took issue with the approach of implementing the new rules through a Regulation, rather than through a Directive, as it would have a “direct and immediate impact” on EU member states’ labour laws – in violation of existing treaties specifying that social policy is a matter for individual member states.
“In those areas that do not fall within its exclusive competence,” the paper said, referencing social policy issues, “the EU should regulate through a Directive, which gives the necessary flexibility to implement EU laws into member states’ social and labour laws, and not through an immediately binding and hence inflexible Regulation.”
Echoing concerns previously raised by the aba, PensionsEurope also said the European Parliament should not seek to adopt any legislation for occupational pensions without consulting the Employment and Social Affairs Committee.
However, it also said existing and forthcoming pensions legislation – namely the revised IORP Directive, as well as the former Portability Directive – would form an “adequate layer of protection” for those participating in occupational pension funds.