In a formal response submitted to the European Commission (EC) Green Paper on Pensions, the National Association of Pension Funds (NAPF) voiced its opposition to proposals for a new solvency regime for pension funds.
The proposed solvency regime could mirror the system that was adopted by the EU for the European insurance industry. The NAPF believes that this would not be appropriate because the pensions industry works in a very different way from the insurance industry.
Joanne Segars, Chief Executive of the NAPF, said: “The European Commission’s aim of ensuring that EU member states provide strong, adequate and sustainable pensions systems is commendable. While a Solvency II type system of regulation is appropriate for insurance, the Commission needs to recognise that occupational pensions operate in a very different way."
“The UK pension system already provides a strong system of member protection through the strength of the employer covenant, the work of the Pensions Regulator and the safety net provided by the Pension Protection Fund. Additional solvency requirements on UK schemes would work against the Commission’s objective of promoting adequacy of pension provision and could lead to the further closure of defined-benefit schemes. There is a rich diversity of pension provision across Member States. It is important that the European Commission recognises this when thinking about how to meet its core objectives of Member States providing a strong, adequate and sustainable pension system.”
© NAPF - National Association of Pension Funds
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