The National Association of Pension Funds (NAPF) commented on the final advice submitted today (Wed) by the European Insurance and Occupational Pensions Authority (EIOPA) to the European Commission on an EU Pensions Directive based on Solvency II.
Joanne Segars, NAPF Chief Executive, said:
“We are disappointed that Europe’s pensions and insurance regulator is still proposing Solvency II-type rules for pension schemes, even though its own advice now acknowledges the damage that would be done to European pensions, jobs and the wider economy.
“Solvency II would pile extra pressure on firms that are struggling to survive during these difficult times. The NAPF’s initial assessment shows that these rules could cost UK pension funds at least an extra £300bn. Faced with extra funding demands, many companies would have no choice other than to close their final salary pension schemes.
“We are pleased that EIOPA has heeded our advice on the fundamental role of the forthcoming Quantitative Impact Study in assessing the impact of its proposals on pensions and the wider economy, and that it has made its recommendations conditional on the results.
“The UK already has a strong system in place to protect its final salary pensions. It does not need additional protection from Europe. The European Commission and EIOPA should instead focus on where they can add real value. Their plans to improve defined contribution pensions and member communication are welcome, and we encourage the Commission to focus its attention on these areas.”
Today’s advice will help the European Commission produce the final draft of the new EU Pensions Directive, which is expected to be presented towards the end of the year.
Earlier in the week, the NAPF, CBI and TUC wrote a joint letter to the President of the European Commission Jose Manuel Barroso and Commissioners Barnier, Andor and Rehn to warn them against the consequences of an EU Pensions Directive based on Solvency II.
The letter said that the new Directive could force all remaining defined benefit pension schemes to close, while it could push many businesses into insolvency, leading to job losses.
Notes to editors:
1. The NAPF is the leading voice of workplace pensions in the UK. We speak for 1,200 pension schemes with some 15 million members and assets of around £800 billion. NAPF members also include over 400 businesses providing essential services to the pensions sector. Contacts:
Paul Platt, Head of Media and PR, NAPF, 020 7601 1717 or 07917 506 683, [email protected]
Christian Zarro, Press Officer, NAPF, 020 7601 1718 or 07825 171 446, [email protected]