Following today's publication of the European Commission's White Paper on Pensions and yesterday's EIOPA (The European Insurance Occupational Pensions Authority) advice to the European Commission on pan-European pension regulations, the Investment Management Association (IMA) said that recognition of the diversity of national pension systems across the EU was essential.
The IMA said that cross-border activity in the European pensions arena remains low, with fewer than 100 cross-border schemes in operation. The European Commission and EIOPA must consider whether extending the scope of the IORP (Institutions for Occupational Retirement Provision) Directive will indeed improve cross-border pensions activity. A one size fits all approach may result in damage to national pension systems.
Commenting, Jonathan Lipkin, Head of Research and Pensions at the IMA, said:
"We welcome EIOPA's recognition of the need to take into account the existing diversity of national pension systems across the EU, which supports the core goal of sustainability at the heart of the Commission's pensions agenda.
"However, we are concerned by the White Paper's reference to maintaining a ‘level playing field with Solvency II' as an aim of the IORP review. Occupational pension schemes and insurance companies are very different in nature.
"Funded pensions will grow in importance in the coming years. Not only should they help individuals to secure a decent standard of living in retirement but they will act as a key source of the investment capital needed for future economic growth. The asset management industry will have a central role in delivering these two outcomes, and looks forward to working with both national and European authorities to ensure that individuals have access to appropriately diversified investment vehicles.
"Both EIOPA and the European Commission emphasise the importance of better information for individuals. We strongly agree with this focus. The gradual transition to defined contribution pensions creates significant challenges. There is a need to ensure that information is both readily available and accessible in terms of the language used to communicate what are often difficult concepts."
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