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02 June 2014

IPE: German pension fund laments IORP II Directive's impact on costs


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The pension fund for German construction workers expressed concerns over the cost of reforms in the IORP II Directive. Under the latter, pension funds must provide members with additional information on their benefits with a standardised annual pension benefit statement.


Peter Gramke, head of Internal Audit at SOKA-BAU, a supplementary pension plan for construction workers, said: "This could cause problems and increase costs significantly". He said it was still unclear whether all prior employers would have to be listed on the PBS, which could "take up a lot of space" considering the mobility of workers in his industry. "And the European Commission still has to set the font size for the information", he noted. According to Gramke, the information requirements are too geared towards pure defined contribution schemes and fail to allow EU member states to adjust them to their national specifics. "It is unlikely the additional information is really 'value for money' for the members", he said.

He argued that the pillar II risk assessment was a "kind of ORSA", but only qualitatively not quantitatively as the Own Risk and Solvency Assessment required from insurers under pillar I of Solvency II. "What might, however, be a problem is the assessment of the Directive four years after its entry into force already when quantitative elements might be introduced after all", Gramke said. This fear has been voiced by others in the German pensions industry since publication of the IORP II Directive.

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© IPE International Publishers Ltd.


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