09 April 2013

EIOPA: Preliminary results of the QIS on IORPs

Large variations in outcomes were found for similar IORPs within some countries, which are not visible in the aggregates presented in this document. IORPs may have used different assumptions, interpretations and simplifications, because the technical specifications were not clear in certain areas or because of time constraints.

The outcomes also show substantial variation between participating countries as a  result of differences in assumptions. One source of variation between countries is that some member states have not included benefit reductions where others did  incorporate such mechanisms.

A supervisory framework not only comprises the prudential balance sheet, but also the set of responses by supervisors. The technical specifications for this QIS did not specify timing of sponsor support and benefit adjustments, tiering of assets and own funds and recovery periods. As such, this QIS cannot be considered a full assessment of a comprehensive supervisory framework.

A number of issues had not been resolved yet and further work needs to be undertaken on other elements of the technical specifications. The public consultation on the technical specifications raised a number of issues. There was not enough time to resolve these issues before the start of the QIS exercise and the decision was made to revisit them at a later stage. It should therefore be recognised that, although this QIS provides insight into the workings of the holistic balance sheet approach, the outcomes of this first QIS must be treated with caution.

Meanwhile EIOPA has initiated the work on sponsor support and aims to publish a report with proposals for revised specifications by the end of June 2013. This and other work would have to be tested in followup QIS exercises, which should be performed to identify what would be the appropriate place of the holistic balance sheet in a future European framework.

Full report

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