11 December 2012

EIOPA consults on draft ITS for occupational pension schemes

Regulatory approach followed in the draft ITS

1. In accordance with the empowerment in Article 20 (11) of the IORP Directive, the draft ITS imposes reporting obligations on Member States via their respective competent authorities. The ITS does not impose any direct obligations on IORPs, sponsoring undertakings or members and beneficiaries. The ITS was drafted in a way to minimise compliance costs for competent authorities and to diminish the possibility of incurred expenses being transferred to other stakeholders.

2. The empowerment to draft this ITS was initially introduced by Article 4(5) of Directive 2010/78/EU (hereafter “Omnibus I”) which amended Article 20 of the IORP Directive. The ITS seeks to ensure that information on national provisions of prudential nature relevant to the field of occupational pension schemes is reported by competent authorities to EIOPA following uniform rules.

3. The draft ITS is concerned with reporting national provisions of a prudential nature. However, there is no definition of “prudential law” in the current IORP Directive. In addition to the IORP Directive, the rules governing the operation of IORPs in Member States may include also inter alia civil law, company law, insolvency law, tax law, social and labour law, which fall - fully or to a large extent - within the competence of Member States. Accordingly, any attempts to draw a clear borderline/distinction between prudential law and other laws for the purpose of this ITS would interfere with the division of competences between EU and Member States.

4. Furthermore, it is important to note that implementing technical standards are implementing acts endorsed by the Commission, and they cannot contain policy choices. As noted in Article 15 of the EIOPA Regulation, ITS “shall be technical, shall not imply strategic decisions or policy choices and their content shall be to determine the conditions of application of those acts".

5. To fulfil the mandate conferred on EIOPA by Article 20 (11) of the IORP Directive, in order to provide a structured overview of national provisions of prudential nature, the ITS requires Member States to report to EIOPA on their prudential rules implementing Articles 9 – 19 of the IORP Directive (with the exception of Article 11), i.e. rules that are in the case of cross-border activity supervised by home competent authorities and must have been implemented in all Member States.

6. The ITS require competent authorities to report also other provisions of prudential nature, applicable to IORPs within their jurisdictions, if any. However, due to the abovementioned practical and legal obstacles it is left up to the competent authorities to identify which provisions are reported.

Deadline for comments to the consultation is 10 March, 2013. EIOPA will consider the feedback received and expects to publish a final report on the consultation by 30 June 2013, and to submit the draft ITS for endorsement by the European Commission by 1 January 2014.

EIOPA consultation page

Please see link below for full consultation paper.

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