AEIP input on integration of EU capital markets: supervision of pension funds should remain at national level
Last week, the European Association of Paritarian Institutions responded to the European Commission targeted consultation on integration of EU capital markets.
In our response, we underlined that EU-level supervision for pension funds would not be appropriate due to their specificities, which differ across member states. For example, IORPs typically offer pension schemes based on particular occupational pension benefits promised by employers to their employees. EU authorities are unlikely to effectively assess the specific nature of IORPs’ operations as they lack thorough knowledge and deep understanding of national social and labour laws, as well as local pension markets. Therefore, AEIP recommends maintaining a minimum harmonisation framework for the IORP II Directive. This approach is effective given the diverse pension systems across the EU. We oppose granting direct EU supervisory powers over pension funds to EIOPA, and advocates for national competent authorities to remain responsible for their supervision.
AEIP also calls for greater proportionality in the EU regulatory framework related to derivatives transactions. IORPs in some member states, such as the Netherlands, trade a significant volume of derivatives for hedging purposes. The current reporting requirements for entities trading derivatives impose an excessive burden for these pension funds. At the same time, we are concerned that such rules could have a negative impact on those IORPs that, by contrast, trade only a limited volume of derivatives. As a consequence of these burdensome reporting rules, these IORPs may stop holding derivatives in their portfolios. This could result in increased risk exposures, especially to interest rate risk, for IORPs.
See our full response in the links below: