Dutch Pensions Federation Harbours Serious Doubts Over Solvency II Rules for Pensions
02 August 2012 (PLANSPONSOREurope.com) - The Netherland’s Pension Federation says it harbours “serious” doubts about new solvency rules for pension schemes which experts warn could lead to plan sponsors being forced to close defined benefit plans.
In its response to a consultation by the European Insurance and Occupational Pensions Authority (EIOPA) on how to measure the impact of the new rules, which aim to achieve a level playing field between insurance companies and pension schemes, the Pension Federation says it has “serious” doubts about the purpose, justification and the need for a revision of the IORP Directive.
The Federation says more Quantitative Impact Studies are needed and calls for a separate consultation on adequate recovery periods. The pension body also attacks the timescale of the analysis of the impact of the new rules as too short.
The Pension Federation adds the review should address the full pension of a country, including the balance between security, stability and adequacy, while more clarity is needed over the entire prudential framework.
According to the Pension Federation, the proposed Holistic Balance Sheet Approach is not functional as a monitoring tool. The Federation adds it is concerned that the consultation model carries risks and can lead to false security.
The Federation says it has major concerns about the extent of the revision and the costs that will arise for pension funds and ultimately their stakeholders.