PwC: More consultation on new pensions directive to avoid risk to schemes

By Rob Starr, Content Manager, Big4.com

The results of a new impact study will help determine how much extra capital pensions schemes will be required to hold against the risk of unexpected events. EIOPA (The European Insurance and Occupational Pensions Authority)  launched a consultation on quantifying the impact of their proposed new directive for occupational pensions (the IORP Directive).

Raj Mody, head of pensions at PwC clarifies the initiative by saying that it was good news that EIOPA are consulting on what options to include in the impact study, but it was unfortunate that the document is so long and complex. Mody says it would have been more helpful to have produced a series of consultations that are country specific, rather than trying to combine all nuances into one document with resulting complexity and loss of clarity.

He also noted the short time frame for responses was a concern. This issue is of such fundamental importance that it would be sensible to allow more time to bring in as many as possible informed views, rather than rushing to a premature, and perhaps inferior, solution.

“We would encourage large pension schemes to carry out their own impact study calculations to ensure the UK figures are not understated, leading to inappropriate EIOPA figures and so that they can start assessing the strategic implications of the directive,” Mody says.  “If the impact study is the basis on which EIOPA will build the pensions framework for the future it is essential that the UK pensions industry makes its voice heard to ensure it is as realistic and robust as possible.”