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29 May 2015

IPE Views: European Parliament debates risks of IORP inaction


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The usual warning shots were exchanged as the EP discussed changes to the EU’s occupational pensions legislation, with some speakers warning that parliamentarians should take care when implementing change.


Wrapping up the public hearing on the IORP II proposals, Hayes, MEP and rapporteur for the IORP directive within the Economic and Monetary Affairs Committee (ECON), warned: “When you are dealing with other people’s money, you have to be very careful. Where we have people who sacrifice a part of the monthly, or weekly, income, to be part of deferred income, we cannot afford to take risks.” On the matter of full funding, Hayes told the hearing at the ECON gathering that the matter should be seriously examined. “We should look for a ‘gold-standard’ across the board.”

The revisions of the IORP Directive published in March 2014 focused on minimum standards on fund governance, minimum information rights for beneficiaries, and standards for prudential supervision by national authorities.

At the ECON hearing, Joanne Segars, chair of PensionsEurope, the voice of the sector, noted that, during recent Council of the EU discussions, certain points of “flexibility” had been agreed by member states. She asked the EP to continue along the same line.

Another speaker, Klaus Stiefermann of aba, the German association for work-place-based pension provision, summed up opposition need for change. “I think we need only minimum standards,” Stiefermann said. “As long as we don’t have a pan-EU unified first pillar pension scheme, we don’t need unified systems for pillars 2 and 3.” Conversely, Green Party MEP, Sven Giegold, stressed that attention was needed to deal with underfunding, especially in the face of low interest rate returns.

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