Next stage of IORP consultation to launch this week
EUROPE - The European Insurance and Occupational Pensions Authority (EIOPA) is to launch a second consultation exercise on the reform of workplace-based pensions legislation (IORP) under instructions from the European Commission.
The Commission plans to unveil draft proposals for a second IORP Directive by the third quarter of 2012, IPE understands. In January this year Michel Barnier, the commissioner responsible, hoped it would be out by the end of this year.
Areas for consultation are to include prudential regulation, the impact on national social and labour law, supervision of outsourced functions and activities, as well as general governance requirements, internal control systems, internal audit and outsourcing.
The exercise, expected to be announced tomorrow, was described to attendees at EIOPA's stakeholders meeting in Frankfurt last week as a "massive consultation" - with one speaker at last week's National Association of Pension Funds annual conference in the UK indicating there would be up to 500 pages of regulation to examine.
The deadline, initially planned to only run four weeks, may be extended to accommodate the number of issues under consideration.
The initial IORP consultation began in April with a request by the European Commission to EIOPA to provide advice on the legislative framework by December.
EIOPA was asked for input on scope, and also on the definition of cross-border activity, prudential regulation and aspects of the governance of IORP. It was the first consultation issued in EIOPA's name.
The challenge of the Commission legislators is to achieve the same objective, while at the same time, avoiding factors in its revised version that would discourage employers from contributing to such schemes.
However, the Commission has to take into account "level playing field" considerations from pensions provided by the insurance sector.
The European Insurance and Reinsurance Federation, (CEA), has already put to EIOPA its position that it strongly supports the application of the "same risks, same rules, and same capital" principle "to all financial institutions providing occupational pension products".
In the summer the CEA added that Solvency II rules should serve as a benchmark for the regulatory treatment of all financial institutions offering occupational pension products, including pension funds. Pension fund institutions oppose this principle.