“The EU should build a robust and proportionate regulatory framework, which delivers on three fundamental objectives: strong governance, full transparency and most of all enhanced sustainability. Let’s take a closer look at these three fundamentals. At the Reichstag, the next stop on our tour, proper governance and full transparency are of course key. EIOPA recommends an upgrade in the governance of pension funds, reinforcing the importance of proper risk management and control functions, while applying due proportionality to avoid undue burden and costs to smaller schemes.
On transparency we recommend the development of an information document that should provide standardised, comparable information on contributions, costs and charges, investment options and expected benefits. We cannot hide anymore behind "jargon" and difficulties of providing information.
In pensions we need to do more to enhance sustainability, to ensure the protection of members and beneficiaries. We have to make sure that any pension scheme disposes of sufficient assets to fulfil its liabilities within a realistic valuation scenario. Recently we consulted on our further technical work on solvency of pension funds. The next step will be an EIOPA quantitative assessment, which will run from May to July. Subsequently, EIOPA will provide technical advice to the European Commission on EU solvency considerations for pension funds in the first quarter of 2016. We will do so on our own initiative, because the solvency issue is too important to ignore.
The scope of our work is broader than previous work done by EIOPA on solvency. There are indeed various ways to shape a market-consistent and risk-based supervisory framework. The holistic balance sheet can be used to set capital requirements at EU level, but also to establish minimum funding requirements and as a risk management tool to assess the sustainability of pension funds. I would like to emphasise that using the holistic balance sheet as a risk management tool should have a follow-up.”
Full speech
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