IPE: EIOPA – Only revised IORP Directive will revive moribund DB schemes

18 October 2012

Gabriel Bernardino, chairman at the EIOPA, has argued that defined benefit (DB) schemes are dead and will be revived only by pending changes to the IORP Directive, as he sought to fend off allegations that proposed solvency capital requirements could force the closure of UK schemes.

Bernardino said no one was interested in running a DB scheme in the current regulatory environment, noting that the number of new funds was "scarce". The chairman stressed that the proposed changes to the IORP Directive were necessary to improve the measurement of investment risk. He added that some of the current regulatory structures in European countries failed to reflect the "economic reality".

Bernardino thanked the UK pensions industry for contributing to past EIOPA consultations, most recently one on the technical specifications surrounding the first quantitative impact study (QIS). Bernardino also pointed out that submissions that simply opposed regulatory change were "not useful", and urged the industry to submit proposals containing constructive criticism.

Bernardino also sought to assure the industry that Brussels did not seek to damage DB funds with changes to the IORP Directive. "To be completely clear on this – our objective is not to kill defined benefit", he said. "On the contrary, it's to create conditions for it to be possible to have defined benefit also in the future."

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