Commenting on the upcoming European Insurance and Occupational Pensions Authority ("EIOPA") consultation on Solvency II and its application to European pension schemes, Jonathan Camfield, partner at LCP said: "If Solvency II were to be applied to UK pensions the result would be a dramatic increase in the assessed liabilities of UK pension schemes - perhaps of the order of £500 billion - and pressure on pension schemes to switch to more secure assets, like government bonds.
Any developments in this direction would clearly be very damaging to the UK's economy, and we understand that the Government has been lobbying at the highest levels to resist this.
Sponsors of pension schemes should be following these developments closely and be asking what any proposed changes might mean for them and how this might affect their strategic pension planning.
We suspect that many companies and pension schemes will wish to respond to EIOPA's consultation. Some may also wish to start lobbying the European Commission on this subject, in advance of a review of the relevant European Directive due to be completed next year."
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