The EU simplification agenda needs to tackle “unnecessary complexity” arising from the Digital Operational Resilience (DORA) Act and the General Data Protection Regulation (GDPR), the umbrella industry group for European pension funds has told the European Commission.
In a position paper on the EU executive’s digital omnibus regulation proposal, PensionsEurope reiterated its calls for the application of the principle of proportionality to be reinforced as occupational pension funds differ fundamentally from other financial entities.
“Applying DORA uniformly, regardless of the type of financial entity, does not work for IORPs and other types of pension funds, as occupational pensions are often managed through social partners and linked to employer affiliation,” PensionsEurope wrote.
“Small and less complex financial entities, such as most of the IORPs, should consequently not be subject to the same obligations as systemically critical players.”
It added: “DORA should stop diverting pension funds’ resources from core operational objectives.”
The European Commission published its EU Digital Omnibus Package in December, presenting it as a targeted legislative simplification exercise of the body of EU digital and data legislation – the “digital acquis” – with a view to reducing duplication, regulatory friction and compliance burden, while formally preserving the essential substance.
According to PensionsEurope, the digital omnibus proposal should lead to further changes to DORA, beyond incident reporting, and not focus on the centralisation of incident reporting.
A centralised hub, as proposed by the Commission, would only increase cost and complexity for the funded pension sector, according to PensionsEurope.
It also called for “meaningful” simplification of the GDPR needs to be achieved, with additional legal basis for health data processing where necessary, in particular in areas creating legal uncertainty for pension funds.
“Such changes would materially reduce the operational burden on pension funds,” the industry body said.
EIOPA seeks input on integrated data collection
In another European pensions policy development, EIOPA on Friday published a discussion paper to gather feedback on “potential inefficiencies, overlaps and inconsistencies in regulatory reporting and disclosure requirements, as well as on possible solutions to address them”.
As part of the amended Solvency II Directive, the European supervisor has a mandate to produce a report for the European Commission on potential measures for an integrated data collection system.
According to EIOPA, the inclusion of IORPs – European pension funds regulated by the IORP II Directive – within the scope of its report “reflects EIOPA’s long-standing objective to harmonise regulatory reporting across the sectors under its responsibility”.
This may irk the European pension fund sector, as Solvency II is a maximum harmonisation law while IORP II leaves discretion to member states.
EIOPA is looking for comments by 10 June.
