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The European Insurance and Occupational Pensions Authority (EIOPA) last week announced the results of its peer review of pension funds’ statement of investment-policy principles (SIPP).
These became a requirement under the original Directive for Institutions for Occupational Retirement Provision (IORPs), with the recently updated IORP Directive (IORP II) adding disclosure requirements and a requirement for the SIPP to explain how environmental, social and governance (ESG) considerations are taken into account.
EIOPA found that the statements were primarily used as a supervisory tool by national competent authorities (NCAs) – supervisors, essentially – and said they were key to monitoring the suitability of an IORP’s investment policy and proper risk management.
It said the content of the statements “varies between member states and is based on national measures, which the majority of member states have implemented in supplement to the requirements of the IORP Directive”.
The supervisory authority’s peer review also identified best practices for supervision and recommended three actions for NCAs, “with the aim to ease the burden on IORPs”.
Matti Leppälä, secretary general of PensionsEurope, said there were a lot of positives about EIOPA’s peer review, but he argued that it should not be allowed to drive harmonisation of practices across the EU.
He pointed out that there are no delegated acts in IORP II and that EIOPA therefore lacks the power to develop the supervisory convergence it has been pushing for with respect to occupational pension funds.
He said it was down to member states to implement the requirement for a SIPP, which looks set to be regulated under Article 30 of the new IORP Directive, and that “too much harmonisation” should be avoided.