It is “crucial to recognise the inherent distinctions” between pension funds and other financial entities, the European Association of Paritarian Institutions (AEIP) executive director, Simone Miotto, has said.

His comments come in response to the European Commission’s (EC) consultation on the rationalisation of reporting requirements, in which AEIP has submitted feedback.

AEIP welcomes the EC’s initiative to ease burdensome reporting requirements. The AEIP stated that the regulatory burden on iorps has increased significantly over the past few years, due to the 2016 review of the IORP Directive and applicable horizontal legislation such as sustainable finance legislation and the Digital Operational Resilience Act (DORA).

The association argued that this has detrimental effects resulting in additional financial burdens on iorp members and beneficiaries, ultimately diminishing pension benefits. AEIP underlines that striking the right balance between regulatory oversight and the operational needs of pension funds is essential to ensure the long-term financial well-being of pension funds and pension beneficiaries.

Furthermore, AEIP advocates for the stabilisation of regulations. The continual evolution of reporting requirements necessitates the adjustment of national systems and procedures, leading to unwarranted and counterproductive complexity.

Commenting, AEIP executive director, Simone Miotto, said: “It is crucial to recognise the inherent distinctions between paritarian institutions, such as occupational pension and healthcare funds, and pure financial market entities.

“Belonging to the welfare state and offering social protection, paritarian institutions exhibit distinct qualities compared to other participants in the financial market. For instance, they operate on a ‘not-for-profit’ basis, they lack shareholders and, notably, refrain from product sales. Likewise, rather than customers, paritarian institutions have members and beneficiaries.”

AEIP strongly believes that transparency and accountability are crucial in managing pension and healthcare funds, still overly excessive reporting requirements can have detrimental effects on these funds' efficiency. AEIP suggests that the way forward is to make reporting simple and relevant (proportional) and always consider a cost-effective approach for pension and healthcare funds and their members and beneficiaries.

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