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Barnett Waddingham responds to EIOPA consultation paper on changes IORP
Barnett Waddingham LLP has responded to the European Insurance and Occupational Pensions Authority (EIOPA) consultation paper on its draft advice to the European Commission on changes to the Institutions for Occupational Retirement Provision (IORP) directive and in particular, the impact the changes will have on UK defined benefit occupational pension schemes.
Commenting on their response,
Andrew Vaughan, Partner in the Corporate Consulting Team said that “overall, we at Barnett Waddingham are concerned that the proposals will impact adversely on the UK private sector pension system and, contrary to the EU’s aim, could lead to reduced security and reduced retirement income for many.
“We do not support the “holistic balance sheet” proposal laid out in the consultation and believe it could have negative financial consequences for many financially strong UK employers. Were it to be implemented, then this would lead to future benefit accrual being reduced in many more cases and many more defined benefit schemes being closed completely to future accrual, ultimately leading to potentially lower pension provision at retirement for the current workforce.
“There are fundamental differences between insurance companies and IORPs; defined benefit occupational pension schemes were not designed to be funded to insurance company levels and are not run on a competitive or profit making basis.
“The UK already has several pension scheme funding-based triggers in place set by the UK Pensions Regulator for monitoring schemes. Increased governance and reporting requirements would only add to the costs to UK employers on running defined benefit schemes."
For more information please contact
Andrew Vaughan or
Steph Gold