Pensions - Articles - PLSA hails EIOPA's decision not to pursue EU Solvency regime

 Joanne Segars, Chief Executive, Pensions and Lifetime Savings Association, said: “EIOPA’s decision to end its work on solvency marks an important development in the long-running debate about a solvency-based funding regime for pensions. It is good news for pension schemes in the UK and Europe and a result our member pension schemes have campaigned tirelessly to reach.

 “EIOPA now proposes a new reporting regime for pension funds, to run alongside existing regulation. The report acknowledges this would add €210 million (£167 million1) a year to costs. It would cause unnecessary confusion without delivering any benefit to scheme members.

 “We believe there are more pressing priorities for EIOPA to pursue such as extending workplace pension saving to the 60% of EU citizens who have no access to it at present. Abandoning the solvency project is a good decision, but EIOPA should now go further and drop the Holistic Balance Sheet altogether.”

 Latest figures2 for the Holistic Balance Sheet show that, if implemented in the UK, a solvency-based system would have increased the combined deficit of defined benefit (DB) pension schemes to €967 billion (£770 billion) – from €318 (£253 billion) under the current UK regime.