The European Commission's attempt to harmonise regulation shows that it lacks a proper understanding of European pension systems' diversity, according to the UK National Association of Pension Funds (NAPF).
The European Federation of Retirement Provision had previously criticised the CfA as being premature and too reliant on Solvency II. Walsh, the NAPF's senior policy adviser, also warned about the impact of Solvency II on UK pension funds, claiming that the increased cost of funding would deter sponsors. He said that if the Commission developed a "firm understanding" of differences within the European pension system, it would better appreciate the potential complications of pan-European pensions regulation.
"The more appreciation they have of the sheer variety of pension schemes, the more they would appreciate the difficulties that would be involved in having greater harmonisation of pension regulation", he said. "That might help dissuade them from the course they seem to be set on."
Walsh was also critical of Commission proposals for a new IORP Directive, saying the belief that a "bigger and better" Directive would lead to an increase in the number of cross-border funds was flawed. Lack of demand, he said, is the real reason for slow growth. He said it was more important to tackle tax discrepancies in Member States, adding: "The Commission really hasn't made a proper case, and we don't buy their argument that, by having a new IORP Directive, the starting point for it should be Solvency II".
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