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Lord Hutton, who reviewed public sector schemes in 2011, said the European Insurance and Occupational Pensions Authority's Solvency II-style proposals for schemes will "create a pension disaster for Britain“. He argued there is "no evidence" of regulatory arbitrage between the pensions and insurance industries, and added: "Imposing a regulation designed for one sector on another is bad policy".
However, European Commissioner for the Internal Market and Services Michel Barnier, who has been closely involved in the commission's review of the Institutions of Retirement Provision Directive, hit back at Hutton. Barnier said DB schemes are suffering due to the financial crisis. "This development reflects economic reality and has nothing to do with the review of the EU's pension funds directive, which dates from 2003", he said.
He stressed that no legislation has yet been made, and that all EIOPA has done so far is carry out a quantitative impact study examining "the potential costs and benefits of the introduction of a more risk-based solvency regime to occupational pension funds".
See link below for Barnier's letter © Financial Times