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EIOPA published the stress test results of the European Institutions for Occupational Retirement Provision (IORPs) in 17 EU countries on 26 January 2016. PensionsEurope published a position paper that analyses the results and the methodology of the stress test.
Janwillem Bouma, Chair of PensionsEurope, said: “The stress test results show that IORPs are able to mitigate financial shocks and work as stabilising factor for the financial sector. Moreover, the results show that the holistic balance sheet methodology does not work. PensionsEurope is willing to explain its concerns in advance of EIOPA publishing the Quantitative Assessment report in order to help EIOPA avoid taking a wrong path.”
Secretary General/CEO of PensionsEurope Matti Leppälä stresses that exploring the impact on retirement income in the stress test seems more useful than the impact on the balance sheet. “Given that EIOPA finds pension funds pose no systemic risk, future stress tests would best be used to highlight the risks to individuals’ retirement prospects. This would help to underpin the central message that we all wish to get across – that more people should be saving more for their retirement.”
PensionsEurope states that bi-annual stress tests would be excessive and the frequency and content of possible future stress tests has to be carefully considered.