The European Association of Paritarian Institutions (AEIP) has said the European Commission’s proposal for changes to the EU pension fund framework does not sufficiently recognise the diversity of IORPs across member states.
Werner Schneider, president of the industry group, said it was the proposal that introduced “a number of governance and communication requirements that do not appear appropriate for paritarian institutions, given their specific social role, long-term investment perspective, and joint governance model based on equal representation of employers and employees”.
“Such requirements risk increasing administrative costs and burdens for IORPs without delivering clear added value for members and beneficiaries.”
He singled out a proposed introduction of an explicit duty of care for IORPs, saying it could create unnecessary duplications.
Having published its position paper on the Commission’s supplementary pensions package, AEIP said it stressed the importance of maintaining the current minimum harmonisation approach of the IORP II Directive, and cautioned against the introduction of delegated acts and “extensive powers” foreseen for EIOPA in several areas under the proposed review of the IORP II Directive.
The proposed requirement for EIOPA to develop regulatory technical standards specifying the details of presentation of information and format of the Pension Benefit Statement was “a clear example of misalignment with the minimum harmonisation approach underpinning the Directive”, it said.
Reiterating the importance of proportionality, AEIP said that removing the reference to “size” from the proportionality criteria and introducing additional obligations could place unnecessary pressure on such institutions without clear added value for members and beneficiaries.
On a positive note, AEIP said it welcomed the proposed clarification of the prudent person principle, which could create more room to invest in alternative and illiquid asset classes, such as infrastructure, private equity and private debt.
At the same time, it said, IORPs should retain sufficient flexibility to align investment decisions with their risk profile, benefit structure and long-term objectives.
