We support the objectives identified by EIOPA as fundamental to any regulatory framework: enhanced sustainability, strong governance and full transparency.
Unfortunately, the consultation scope and the assumptions underlying it (which relate to the extension of an EU regulatory framework to solvency, and the adoption and use of the holistic balance sheet) while well-presented and thorough, are most unlikely to help achieve these objectives if adopted by the Commission. Rather, they are likely to hinder the continuation and inhibit the growth of employer-sponsored pension provision within the EU, whether nationally or cross border, without materially improving member security.
At the same time, they will create material unnecessary business costs, potentially impede corporate business plans, and affect investment markets and available investment capital. They do not appear to facilitate the Commission’s own objective of smart and sustainable growth.
There is no competition between IORPs and insurers. IORPs are sponsored by employers, and are not open to general consumers. The possibility of regulatory arbitrage between financial sectors is a concern that appears to have been overstated; it is difficult to imagine in practice. Single market considerations cannot therefore be considered as justification for flawed regulation.
The significant numbers of certain kinds of IORPs in very few member states means that sponsoring businesses located in those states will be disadvantaged in a way that distorts rather than enhances the single market.
Provided national law and regulation is robust and risk-based, there is no need for the suggested intervention at EU level and no point in harmonisation for harmonisation’s sake.