Jack Jones reports on industry reaction to Europe's plans for UK pensions.
Pensions professionals were given plenty of bedtime reading last week as European Union printing presses in Frankfurt and Brussels went into overdrive.
On Wednesday the European Insurance and Occupational Pensions Authority published its final advice to the European Commission on a new Institutions for Occupational Retirement Provision directive which threatens to usher in ‘Solvency II for pensions’.
The regulator focuses on how to harmonise pensions regulation across Europe but leaves open the contentious question of how solvency adequacy requirements will be imposed on schemes until it completes an impact assessment later in the year (PP Online, 24 January).
And as the industry was digesting that 515-page tome, the commission slipped out a slim 40-page volume on reforming pension systems across the continent.
This white paper looked at how member states could tackle the problems of an ageing population and included a commitment to revise the IORP directive and bring in Solvency II-type regulation (PP Online, 16 February).
The reaction to the publications in the UK was mixed, with many in the industry backing the commission’s goals but warning of the dangers of introducing onerous new regulation.
EIOPA advice – a ‘veiled rebuke’
On the EIOPA advice, the National Association of Pension Funds – which joined forces with the TUC and Confederation of British Industry earlier in the month to denounce the plans (PP Online, 13 February) – is still disappointed.
Chief executive Joanne Segars says: “Its own advice now acknowledges the damage that would be done to European pensions, jobs and the wider economy.”
She adds however: “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.”
Standard Life head of pensions policy John Lawson thinks the latest version is an improvement on the draft as it recognises the benefit of the Pension Protection Fund and moves away from some of the more severe capital requirements.
But he adds there is still plenty of cause for concern, saying: “Some of the areas where they have suggested applying Solvency-II type rules for pensions would be counter-productive and, far from improving pension provision for EU citizens, may render many existing pension arrangements unsustainable.”
Railways Pension Trustee Company chief executive Phil Willcock has quit the scheme after only 10 months to take up a position as head of AIG UK Life.
The Financial Conduct Authority (FCA) has launched a consultation on how to enable defined contribution (DC) savers to invest in patient capital via unit-linked funds.
The Pension Protection Fund has published its final levy rules for 2019/20 following a consultation launched in September.
The Competition and Markets Authority's (CMA) final report on the investment consultant market has been celebrated as having "real teeth" to produce better outcomes for members.