Europe’s top pensions lobby group has called for a 12-month delay to the implementation of EU-wide reporting requirements for pension funds.
PensionsEurope also warned that data reporting rules proposed by the European Central Bank (ECB) and the European Insurance and Occupational Pensions Authority (EIOPA) placed a “big financial burden” on some pension funds.
Many of its members would not be ready to comply by December 2019 when the requirements are due to come into force, PensionsEurope said in response to a consultation on the proposals.
“In many countries pension funds would need more time to adapt their reporting systems to the new requirements in order that their implementation costs will not become enormously high, and therefore we propose to postpone the first reporting at least by one year,” the group stated.
A delay was particularly important given EIOPA’s decision to require reporting using the “extensible business reporting language” (XBRL) online framework. Although it is in use for Solvency II reporting for insurance companies, PensionsEurope said pension schemes would require “not only new software solutions, but a completely different know-how [for] employees”.
“Reporting for EIOPA and ECB is an additional cost factor to the detriment of beneficiaries and sponsoring companies”
The group acknowledged several concessions made by the central bank and EIOPA, including estimating quarterly liability calculations themselves and collecting information from national regulators.
However, PensionsEurope also reiterated its primary concerns that the reporting requirements would place a major financial burden on pension funds, and urged the ECB and EIOPA to gather as much data as possible from national regulators instead of directly from schemes.
It has repeatedly warned EIOPA and the ECB of the cost and administrative burdens data reporting could pose to pension schemes.
Some pension funds do not have access to “granular” information on their investments from their asset managers, PensionsEurope added, and should not be forced to pay for “expensive licenses” to access such data.
“We would like to stress that statistical reporting and collecting information always contain costs for pension funds, so it should be very carefully considered which information is relevant and needed, and how often they should be reported,” the lobby group stated.
“Any extra costs will be [ultimately] paid by the sponsor and/or members and beneficiaries… Increasing regulation and other requirements make occupational pensions more expensive, making it less likely that pension schemes are being set up and contributions paid.”
It added that the new requirements would be “additional reports without any chance of simplification or elimination for reporting requirements that already must be fulfilled nationally”.
“The reporting for EIOPA and ECB is therefore an additional cost factor, in the low-interest [rate] environment, to the detriment of the beneficiaries and sponsoring companies,” PensionsEurope concluded.
PensionsEurope’s full response can be found here.