PensionsEurope has raised concerns about the implications of Brexit for the representation of pension funds at a European level.
Responding to the European Commission’s consultation on the operation of the European Supervisory Authorities (ESAs), PensionsEurope said occupational pensions experience was lacking on the board of supervisors of the European Insurance and Occupational Pensions Authority (EIOPA).
“We see that most members have an insurance-only background, whereas they are also involved in decision making with respect to IORPs, which differ substantially from insurance companies (and banks),” said the industry association.
It said this “lack of hands-on experience and expertise” with pension funds could get worse after Brexit.
“Without implying anything on the potential benefits of a ‘twin peak’ structure for the ESAs” – a reference to a proposed merger of EIOPA with the European Banking Authority (EBA) – “we nevertheless would like to stress that the specific nature of IORPs has to be duly recognised and taken into account,” PensionsEurope said.
The trade association said “a clear separation” between the banking, insurance, and occupational pension sectors was most important. The unequal development of EU supervision across these sectors should be reflected in the ESAs’ work, it said.
However, “this does not have to preclude a different set-up from the present one”, PensionsEurope added.
It said consumer protection supervision was not needed for occupational pensions as members and beneficiaries were mainly protected by national-level social and labour laws.
InsuranceEurope, PensionsEurope’s counterpart for the insurance industry, has come out against the Commission’s idea of EIOPA merging with or transferring some of its responsibilities to another ESA. It said splitting responsibilities or losing a dedicated insurance supervisor would damage the quality of supervision.
The EBA is currently based in London, but it is expected that EU member states would require it to relocate, given the UK’s pending exit from the EU.
Away from the question of a twin peaks structure, PensionsEurope advocated the creation of an internal committee on occupational pension issues within EIOPA, to ensure that decisions about IORP supervision were made by those with relevant expertise and experience.
PensionsEurope also used its submission to the Commission consultation to reiterate concerns about EIOPA interfering too much in occupational pensions. It told the Commission that EIOPA’s mandate should set clear limits on the authority’s tasks and powers. EIOPA rules should be amended, PensionsEurope argued, as its current objective – to ensure convergence of supervisory practices – was not appropriate for workplace pensions.
It said the ESAs had more than enough powers and tools with regard to pension funds, and these should mainly be supervised by national authorities.
PensionsEurope’s full response is available here.