08 April 2008

CEIOPS fact finding survey on existing solvency rules for IORP

CEIOPS published a report on technical provisions and security mechanisms in the European occupational pensions sector which focuses on IORPs providing defined benefit schemes, whether exclusively or in combination with defined contribution schemes, as covered by the IORP Directive. The survey provides a factual basis for a broad consultation on solvency issues for occupational pensions.

The report finds that the provisions of minimum requirements of the IORP have been exceeded in some Member States. In this respect, the Directive has natural limits with respect to convergence in the solvency requirements related to IORPs in the EEA.

At the same time comparable member protection for IORPs, where appropriate, is needed to ensure a level playing field between countries. In a cross-border perspective, substantive variations in regulatory requirements may spur regulatory arbitrage by IORPs and supervisory competition between Member States, the report states.

While an integral application of Solvency II requirements to pension institutions could resolve this issue, the material differences between pension funds and insurance companies in many countries suggest this is not an appropriate course to pursue, it says. Such action could lead to excessive costs and thus bears the risk of threatening the continued provision of defined benefit schemes.

A broad consultation is envisaged for later this year. 

Press release

Survey

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