Swedish pension providers want more time to adapt to new rules resulting from the EU’s IORP II directive, according to responses to a government proposal.
Insurance Sweden (Svensk Försäkring), which counts the country’s main pension providers as its members, said the transitional rules that are to apply following the 1 May deadline for implementation next year should remain applicable for three years, not just the two months envisaged in the draft.
“In order for insurance companies to be able to make decisions and gain knowledge of more detailed business conditions, Swedish insurance requires the transitional rules to be extended for occupational pension providers up to and including 2022,” the association said.
As well as this, it said the government could consider putting the new rules into effect slightly later than 1 May “in order to ensure that the regulation is appropriate”.
The Swedish occupational pension fund association, Tjänstepensionsförbundet, also called for the transitional rules to remain in force until the end of 2022.
“The time pressure risks leading to less rational solutions as well as unnecessarily high adjustment costs,” the association said.
Insurers split on definitions, solvency rules
However, there were differences of opinion on the draft regulation among the members of Insurance Sweden. The association said it did not have a unified position to put forward relating to some basic questions to do with the draft law.
“It concerns whether or not the activity of the occupational pension companies is considered to be an insurance business, and some proposals go beyond what is required to implement IORP II,” Insurance Sweden said, referring to this as “gold-plating”.
Separate responses to the consultation were presented by Insurance Sweden members AMF, Alecta, and others.
The new draft rules go beyond the IORP II directive to include a tougher set of solvency rules. These include a risk-sensitive capital requirement, in line with the requirement in the Swedish Financial Supervisory Authority’s ‘traffic light’ funding model.
The new rules also stated that providers of occupational pensions in Sweden should be able to change their pensions business into a new type of company.
Providers – including insurance companies, workplace pension savings institutions or friendly societies (tjänstepensionskassor) – could be converted into a new type of entity, known as an occupational pension company, or tjänstepensionsföretag, under certain conditions.
Sweden’s government closed its consultation on local implementation of the IORP II directive on Friday.