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The revised IORP Directive should not seek to distinguish between defined benefit (DB) and defined contribution (DC) pension funds but instead simply examine the risks borne by individual IORPs, according to the European insurance association.
PensionsEurope questioned why information disclosure requirements – under the current IORP II draft only affecting DC schemes – should be limited to the one type of fund. Commenting on the IORP II draft published earlier this year, the association also took issue with pension funds no longer being subject to quantitative requirements – dropped when the first pillar of the revised Directive was discarded by internal markets commissioner Michel Barnier.
The position paper said the decision raised concerns that IORP members would not be as protected against losses as their insurance saver counterparts, an argument repeatedly used by the insurance industry to call for an ‘even playing field’ for those providing retirement benefits. It also argued that any revised IORP Directive should focus on the activities of IORPs, not the underlying scheme.
“It is often very difficult to establish a clear-cut distinction between DB and DC schemes anyway, as the features of the schemes vary between member states, and many schemes sit somewhere along a spectrum ranging from pure DC to pure DB,” it said. “For example, the distinction in the proposal between which information requirements should apply to DC scheme and DB scheme members, respectively, does not make sense. “Additionally, information requirements should be based not only at the pension scheme but also take into account the activities and risks borne by the IORPs.”
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