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Janwillem Bouma, chairman of PensionsEurope, reiterated a previous call for “a period of legislative calm”, this time until a planned review of the IORP II directive in 2020.
Speaking at the occupational pensions conference organised by the German newspaper Handelsblatt in Berlin, Bouma criticised the European Insurance and Occupational Pensions Authority’s (EIOPA) approach to further reforms.
“PensionsEurope has rejected the holistic balance sheet [HBS] approach but EIOPA continues to work on the ‘common framework’ – as if a name change was changing the subject,” Bouma said. “IORP II already contains a thorough framework for pension risk management and pension funds already regularly carry out stress tests as part of their own processes.”
Bouma warned that HBS was “not an appropriate instrument and it should not be part of the stress tests”.
He also added a possible alternative approach for EIOPA: “By using alternative approaches such as cash flow analysis many of the problems that the ‘common framework’ would bring could be avoided.” As an example, Bouma cited the mark-to-market approach.
But the PensionsEurope chairman also added some positive notes, welcoming the decision to use one scenario, rather than three, “which means fewer costs and less effort for IORPs”.
EIOPA chairman Gabriel Bernardino confirmed the stress tests will be issued “in mid-May” this year, as planned.
“This year’s stress test will include all European countries with material IORP sectors,” he said.
He added that the stress tests would help to “assess the impact of pension funds on the real economy”.