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Hayes also said the introduction of the holistic balance sheet (HBS) was “not realistic in practical terms” and proposed changes to cross-border funding arrangements.
In his preliminary report on the Directive, Hayes suggested that neither the European Commission nor the European Insurance and Occupational Pensions Authority (EIOPA) had the power to draft additional technical standards – essentially removing the ability to impose additional requirements without parliamentary scrutiny.
He also raised concerns about EIOPA’s development of the HBS, arguing that the model was not “realistic in terms of costs and benefits” in light of pension fund diversity across Europe.
the report added that no capital requirements for IORPs based on either Solvency II or the HBS should be developed “at [EU] level”, as these could “potentially decrease the willingness of employers to provide occupational pensions”.
The report also removed the requirements for the REP, instead suggesting a fund should conduct risk assessments in line with the “nature, scale and complexity of its activities”.
In what appears to be a well-intentioned attempt to remove requirements for full funding from cross-border IORPs, Hayes also proposed that IORP full funding requirements should only take effect from “the moment when the institution starts operating a new or additional scheme”.
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