CEIOPS issues all clear in spring report
EUROPE - The financial crisis has had no systemic impact on the EU's private pension system, according to the Spring Financial Stability Report 2010 of the Frankfurt based Committee of European Insurance and Occupational Pensions (CEIOPS).
However, equity volatility is expected to remain high, respresenting for a significant risk for pension funds, although CEIOPS notes that national supervisors did not encourage funds to move away from equities over the duration of the financial crisis.
"The impact of financial turmoil on the European occupational pension system [has] not been as severe as seen in other financial sectors, as the long term nature of the liabilities affords some protection in this respect," the report adds.
It also notes on-going evaluation exercises to monitor the impact of the crisis on pension funds and to evaluate the need for further regulatory of legislative changes to mitigate the procyclical effect of solvency rules and to improve the risk management.
For DC schemes, CEIOPS states that increasing attention is being paid to financial education. This is in order to strengthen awareness of risks involved in financial market investments. The funding ratios of DB schemes were improving, but remain below 2007 levels.