Pensions - Articles - EIOPA publishes a Consultation on solvency of IORPs

 EIOPA has published a consultation paper on further technical work on the holistic balance sheet to gather input from stakeholders. The paper constitutes a further step in EIOPA’s work on a risk-based framework for occupational pension funds. EIOPA is undertaking this work on its own initiative, in its role as independent advisor to the European political institutions.

 The consultation paper proposes improved definitions and methodologies to value the holistic balance sheet, covering areas such as the valuation of sponsor support, the benefit reduction mechanisms and discretionary decision-making processes and the definition of contract boundaries.

 Most importantly, the paper consults on different possible uses of the holistic balance sheet within a supervisory framework, ranging from an instrument to establish funding requirements to a risk management and transparency tool to assess the long-term sustainability of IORPs.

 The further work on the holistic balance sheet has to be tested through a quantitative assessment. EIOPA expects to publish draft technical specifications for such an assessment by early 2015.

 The consultation will end on 13 January 2015.

 The relevant documentation and the template for comments can be viewed here