QIS Too Technical for Some European Plan Sponsors

03 August 2012 (PLANSPONSOREurope.com) - The complexity of the quantitative impact study into new solvency style rules for pensions is “well beyond” the capabilities of some European plan sponsors EIOPA’s Occupational Pensions Stakeholder Group said in its response to a consultation on the topic.

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 level the playing field between insurance companies and pension schemes, the group said EIOPA’s quantitative impact study (QIS) could prove too onerous for some plan sponsors.

The response says: “Whilst the technicalities are very important, they should be subordinate to the overall goals of the European Pension Policy. Initial comments of large European companies who sponsor their own pension funds as HR vehicles indicate that the QIS and its complexity is well beyond their capabilities. It would be counterproductive if the new IORP Directive became the catalyst that led to scaling back second pillar pension provision or to move the pensions outside the scope of the IORP Directive – moving back to first pillar pensions, shift to book reserves or individual defined contribution schemes. This is undesirable, given the fact that only 40% of European employees are currently participating in a supplementary pension scheme and the recognised need for more supplementary pensions in Europe. If supervision of the second pillar IORPs becomes too inflexible, it will increase the pressure on the first pillar which, according to the [European] commission, is already under stress in many countries.”

PLANSPONSOREurope Staff
editors@plansponsoreurope.com