IPE: CEE countries unlikely to come under IORP Directive, predicts EIOPA stakeholder member

21 October 2011

The mandatory retirement pillars of central and eastern European countries, as well as unfunded pension funds, will not be subject to a new IORP Directive once the new draft is published, a member of the European Insurance and Occupational Pensions Authority (EIOPA) stakeholder group has predicted.

The European Federation for Retirement Provision predicted that bringing the mandatory pillars under the IORP Directive would lead eastern European states to follow the Hungarian example of bringing private pension savings under control of the country's treasury.

Hungarian prime minister, Viktor Orban, in June saw the proposal to transfer private pension scheme assets to the treasury approved, with the €11.8 billion in funds used to reduce the country's deficit.

The Commission was "very keen" to see a universal standard measure applied to sponsor covenants, but insisted that any regulation needed to take into account the UK's Section 75 regulation – under which a company was required to pay trustees any outstanding deficit in case of an insolvency – as it was stronger than regulation in other European States.

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