Commenting on the European Commission’s decision to postpone proposed Solvency II requirements for pension schemes, Colin Richardson, Senior Actuary at Buck Consultants said:
“Employers with defined benefit pension schemes are giving a huge sigh of relief in reaction to the announcement that the draft solvency II proposals for pension schemes will not be included in the IORP (Institutions for Occupational Retirement Provision) Directive. In addition, the UK Government, who has been fighting relentlessly to have this proposal quashed, will also be relieved as the proposals could have had a damaging effect in terms of UK economic growth prospects.
“Implementation in its draft form would have accelerated over a short number of years amounts up to £500 billion to extinguish deficits and create capital buffers to meet the requirements. The impact would have been to reduce companies’ ability to invest for growth.
“Before we get too carried away about common sense having prevailed however, the official EU announcement is of a “delay” rather than abandoned whilst more information is collected and assessed. There was no acknowledgement that the proposal itself is inappropriate and it is a long way from gaining unequivocal pan-European support. Nevertheless, it is likely that the UK government will be celebrating tonight after delivering on their commitment to fight this proposal on behalf of UK companies.”
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