IORP rapporteur rewrites own draft on cross-border pension funds
Brian Hayes has tabled amendments to his own report on the IORP Directive, seemingly in an attempt to remove the risk of scheme mergers or accrual changes triggering full-funding requirements.
The Irish MEP, IORP rapporteur for the Economic and Monetary Affairs Committee (ECON), in July proposed a number of changes to the legislation to lift the burden of full funding imposed on cross-border funds.
In his initial report, the MEP suggested a scheme be required to meet technical funding provisions when it started operating “a new or an additional scheme”, raising concerns within the industry that changes to a fund’s accrual or contribution rates could be viewed as the launch of a new scheme.
Hayes, a member of the European People’s Party, has now attempted to clarify his intention, amending the text to state that the merger of “two or more existing schemes or an addition of a new section to a scheme” should not be regarded as an additional scheme.
His amendment, dated 5 October, is in stark contrast with one tabled by Bas Eickhout, a Dutch MEP and member of the Greens, who amended the European Commission’s draft Directive to state that assets fully cover liabilities “at all times and under suitably prudent assumptions of future returns on assets in order to protect the interests of members”.
Sophia in ’t Veld, Dutch shadow IORP rapporteur and member of ECON, proposed removing much of the Commission’s involvement in cross-border regulation, instead proposing an exchange of best practice between national regulators to “stimulate” cross-boarder pensions.
In a likely victory for the UK’s ShareAction and Eurosif, Anneliese Dodds, a UK member of the Socialists and Democrats, sought to reinsert a focus on environmental risk management, arguing that any risk assessment should look at “environmental, social and governance” matters.
The Commission initially proposed such a focus, but it was removed by member states during negotiations in late 2014.
Eurosif and ShareAction spoke with MEPs earlier this year, arguing that pension funds should be required to look at all three areas.
Eickhout also tabled an amendment suggesting funds should not see stranded assets as part of a long-term strategy, and should have “effective mechanisms” for mitigating risks.