Pensions - Articles - EIOPA proposals complex and costly says Barnett Waddingham

 Rowan Harris, actuary at Barnett Waddingham, says:
 “Once again, EIOPA is missing the point. There remain key differences between the level and type of benefits in member states, driven primarily by social and labour law, and so it is not appropriate for solvency requirements to be set at European level. Any proposals to increase funding requirements should not be taken lightly given their impact on the companies sponsoring pension schemes and, therefore, prospects for employment and economic growth.
 
 “This consultation ignores the considerable progress that has been made by pension schemes in recent years under the current funding regime. In the UK, the Pensions Regulator’s Code of Practice encourages a proportionate approach to funding and risk management. Trustees and employers are more engaged than ever in understanding the funding of their schemes, their employer covenant, and the risks they face. The holistic balance sheet approach as envisaged by EIOPA would be complex, costly and counterproductive.”
 
 EIOPA is undertaking this work on its own initiative and, following the consultation and an impact study, it intends to provide advice to the European Commission on EU solvency rules for pension schemes.