EU member states are clawing back powers from the European Insurance and Occupational Pensions Authority (EIOPA), according to a revised draft of the IORP Directive that would see responsibility for the proposed risk assessment framework resting with national regulators.
The compromise text also sees an attempt to remove Poland’s private pensions pillar completely from the scope of the Directive, and potentially grants members the powers to veto a cross-border move.
A prior draft drawn up by the Italian government, which currently holds the rotating presidency of the Council of the EU, offered further details on the proposed risk-evaluation for pensions (REP), an area that, under the new version, would be the responsibility of individual member states.
According to the newly revised version of Article 29, individual member states’ regulators would be granted the powers to specify the format, structure and sequence of any REP.
The initial IORP II draft published in March granted the European Commission the power to lay down detail of the REP in a delegated act, a clause amended in last month’s initial compromise text to say EIOPA would publish relevant regulations.
The new wording amounts to member states stripping EIOPA of the ability to set technical standards for the sector, reclaiming powers previously delegated to the European supervisor.
Attempts to shift drafting responsibility for the REP to national regulators will be welcomed by many in the industry.
There were previously calls for the framework to be drafted fully before the revised Directive could be passed by the European Parliament, as delegated acts are not subject to parliamentary scrutiny.
Changes to the REP also see “new and emerging risks” reinserted, phrasing removed in the prior draft that would require IORPs to take account of climate-change risks and, potentially, stranded assets, such as coal that can no longer be extracted.
Other notable changes affect the procedures for a cross-border transfer of pension assets, potentially granting members the ability to veto any such move.
Under a rewritten clause that previously only saw the transfer of assets subject to approval by the “representatives of the members and beneficiaries”, the move would now be subject to “prior approval by […] the members and beneficiaries concerned”.
The new version of the Directive also sees an attempt to remove the Polish open pension funds (OFEs) and other Central and Eastern European (CEE) private pillars completely from its scope.
According to the amendment, funds acting “as part of the mandatory social security schemes” should be excluded.
Poland and other second-pillar funds in CEE states are funded by the state diverting part of the first-pillar contributions to the private institutions.