Pensions Europe'supdated position paper on the IORP II review. Pensions Europe's updated position paper on the IORP II review. April2024 www.pensionseurope.eu
PensionsEurope'supdated position paper on the IORP II review. 2 Executive summary Pensions Europe advocates adequate and secure pensions for all European citizens. We areconfident that IORPs can and should play a significant part in providing these. The IORP II Directive is rightly minimum harmonization legislation and this needs to continue. To be highly compliant with the principles of subsidiarity and proportionality, there should continue to be no provisions for delegated acts. ➢Governance and prudential standards •EIOPA believes that the right approach to enhance proportionality is to increase the threshold for the small IORPs exception to below both 1,000members and beneficiaries and EUR 25 million in assets in total with a grandfathering clause.On the one hand, some members of Pensions Europe do not believe that excluding so many IORPs from the scope of EU-legislation would be appropriate as it could put into question the legitimacy and added value of the Directive. On the other hand, other members believe that the implementation of IORP II and various horizontal financial services legislations that are imposed on IORPs, entailed a significant and unwarranted financial burden for them. •EIOPA believes that the right approach is the reformulation of proportionality provisions to ensure a risk-based approach and that the criteria 'size' and 'internal organisation' of the IORP should be removed.Size and internal structure requirements can be very important for the proportionate application of the directive. Their removal will lead to less flexibility in implementation for IORPs and National Competent Authorities and to more administrative burden. •EIOPA recommends that IORPs and National Competent Authorities have insight into material liquidity risks, including in respect of cash margin calls on derivative exposures. Any potential amendments to IORP II concerning liquidity risks should follow a principle- based approach, leaving the implementation of any extra requirement up to the national level. Therefore, an Opinion by EIOPA is highly preferred over guidelines because it gives adequate flexibility for NCAs. •EIOPA advocates changes to various articles to protect members and beneficiaries from potential conflicts of interest between IORPs and service providers.National legislators may be in a better position to adopt any additional measures that specifically address the risks highlighted proportionately and efficiently. •Pensions Europe is extremely satisfied that EIOPA does not advise any change to the IORP II Directive concerning the introduction of a Standardized Risk Assessment. This is a core issue for pension funds and this needs to be taken into account during the upcoming review.
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