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Ireland’s corporate defined benefit pension industry was found to have a deficit of between 81 and 93 per cent of liabilities, while the UK’s combined deficit was put at €527 billion (24 per cent of liabilities), compared with €350 billion under the current funding rules. Even the well-regarded Dutch industry was found to be running a deficit of 21 per cent. The analysis prompted calls for the proposed Directive to be amended or abandoned entirely, from both politicians and the industry.
The Commission had previously said it intended to publish a draft directive in the summer in order to push through the final version before next year’s European parliamentary elections, which will be accompanied by an overhaul of the commission. However, in its quantitative impact study, EIOPA said it needed more time to finalise a pan-European methodology to calculate pension scheme deficits. In particular, it is still attempting to quantity the value of support from the company sponsoring the pension scheme.
IORP II is derived from the Solvency II regime already being rolled out for European insurance companies. Towers Watson’s experience of helping insurers prepare for this was that compliance with the governance and disclosure elements has been “considerably more onerous and costly than had been anticipated".
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