21 October 2016

EIOPA publishes its peer review on the statement of investment policy principles for IORPs

The objectives of the peer review were to explore supervisory practices and to identify the scope for promotion of common supervisory culture and convergence, including the identification of best practices. The peer review examined the extent to which NCAs use the Statement of Investment Policy Principles (SIPP) within their supervisory framework. The peer review particularly focused on the development and approval of the SIPP, its content, the frequency of review and submission to NCAs, consistency checks and assessments performed by the NCAs as well as disclosure practices.

This peer review highlights the importance of the SIPP as a governance and supervisory document that national supervisors can use to verify and monitor the suitability of IORPs’ investment policy and proper risk management. The exercise also shows the potential for further enhancement of supervisory practices to facilitate the qualitative assessment of SIPPs. Furthermore, this peer review reiterates the challenges of communicating investment matters especially to Defined Contribution (DC) pension plan members who are fully or partially exposed to investment risk.

Overall, European Insurance and Occupational Pensions Authority (EIOPA) concludes that the SIPP is primarily used as a supervisory tool for identification of risks and compliance check of the IORP’s investment policy as part of off-site supervision and/or during on9site inspections. The content of SIPP varies between Member States and is based on national measures, which the majority of Member States have implemented in supplement to the requirements of the IORP Directive. With this peer review eight best supervisory practices were identified and three actions were recommended to NCAs, with the aim to ease burden on IORPs:

• Define supervisory procedures relating to the SIPP in order to improve coordination between the NCAs
• A single point of entry for the submission of the SIPP
• Develop appropriate communication to IORPs explaining their obligations and rights with respect to the SIPP

Gabriel Bernardino, Chairman of the European Insurance and Occupational Pensions Authority, said: “The diverse application of the Statement of Investment Policy Principles in the conduct of supervision across Europe confirms the need of achieving greater supervisory convergence in the European Union already in the early stage of implementing the IORP II Directive for the benefit of the European pension scheme members and beneficiaries”.

Press release

The Peer Review of the Statement of Investment Policy Principles

© EIOPA