The National Association of Pension Funds (NAPF) commented on the final advice submitted by the European Insurance and Occupational Pensions Authority (EIOPA) to the European Commission on an EU Pensions Directive based on Solvency II.
Joanne Segars, NAPF Chief Executive, said: “We are disappointed that Europe’s pensions and insurance regulator is still proposing Solvency II-type rules for pension schemes, even though its own advice now acknowledges the damage that would be done to European pensions, jobs and the wider economy. Solvency II would pile extra pressure on firms that are struggling to survive during these difficult times. The NAPF’s initial assessment shows that these rules could cost UK pension funds at least an extra £300 billion. Faced with extra funding demands, many companies would have no choice other than to close their final salary pension schemes. We are pleased that EIOPA has heeded our advice on the fundamental role of the forthcoming Quantitative Impact Study in assessing the impact of its proposals on pensions and the wider economy, and that it has made its recommendations conditional on the results.”
“The UK already has a strong system in place to protect its final salary pensions. It does not need additional protection from Europe. The European Commission and EIOPA should instead focus on where they can add real value. Their plans to improve defined contribution pensions and member communication are welcome, and we encourage the Commission to focus its attention on these areas.”
The letter said that the new Directive could force all remaining defined benefit pension schemes to close, while it could push many businesses into insolvency, leading to job losses.
Press release
© NAPF - National Association of Pension Funds
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