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Giegold said the results painted “a gloomy picture”, revealing that defined benefit occupational pension schemes faced a “dramatic” funding shortfall. “This stress test has revealed funding gaps for occupational pensions.”
Giegold said pension schemes were weaker than the stress tests showed, arguing that they did not test a realistic scenario of enduring low interest rates and longer life expectancy.
Giegold said companies should not become hostages to pension promises, “expected to make up the gaps from profits that will be under increasing pressure”. They need to be able to invest while it is also “equally unacceptable to simply assume hidden state guarantees”, he said.
Giegold’s reaction to the stress tests contrast with those of several national regulators and pension fund associations, many of which concluded that the results showed that pension schemes posed no risk to financial stability.
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