OECD neglects social partners' role in long-term investment – AEIP
EUROPE – The European Association of Paritarian Institutions (AEIP) has called on the OECD to recognise the role of social partners when it comes to managing long-term investments and asked for more research on the potential impact of accounting standards and market-consistent valuation.
In a reaction paper to the OECD's draft version of high-level principles for long-term investing, the Brussels-based association said the proposals were "in line with the values and positions of the AEIP".
However, it insisted that the role of social partners in the establishment and management of pension funds, which are in turn "key players" within the field of long-term investments, should be recognised within the draft principles.
The association also argues that any prudential regulatory framework for long-term investing should take into consideration, when applicable, the adjustment and steering mechanisms already embedded in national social and labour laws.
Additionally, the AEIP expressed doubts on the likelihood of harmonising standardised valuation methods among all EU member states.
"In the occupational pensions field, standardisation might be of help for cross-border comparisons," the association said.
"However, it is highly risky to promote a standardised implementation of valuation methods for long-term assets since each country has its own prudential framework."
The AEIP finally called on the OECD to conduct further studies on the impact of accounting standards and market-consistent valuation of assets and liabilities on long-term investments.
The association's comments come a month after the OECD published a draft version of its high-level principles for long-term investing.
At the time, the think tank said any regulatory framework should consider drafting risk-based solvency rules that take into account the liability-matching advantages pension funds get when investing in certain long-term assets.