The European Insurance and Occupational Pensions Authority (EIOPA) has published a consultation seeking views on its draft technical advice for the review of the Institutions for Occupational Retirement Provision (IORP) II Directive.

The draft advice has been composed following a call for advice from the European Commission, with EIOPA expecting to publish its final advice in October 2023.

EIOPA’s draft advice, which is set out in the consultation paper, aims to ensure that the regulatory framework is updated where necessary to “embrace the future”, such as for the shift from defined benefit (DB) pensions to defined contribution (DC) pensions and the challenges presented by climate change.

The authority noted that, at the same time, the draft advice aims to protect the legacy, including areas such as risk assessment and liquidity risks.

EIOPA’s consultation is split into six topics that it wants stakeholders to feed back on and help inform its final advice.

It sought opinions its advice for the adequacy of the directive from a prudential and governance point of view, and the directive’s impact on the stability of different types of IORPs.

In the areas of prudential and governance standards, the authority identified review items on proportionality, liquidity risk, the treatment of conflict of interests, the effective use of data, and standardised risk assessment.

Cross-border activity and transfers were also covered in the draft advice consultation, as well information to members and beneficiaries, and other business conduct requirements.

EIOPA wanted industry views on its advice relating to the need and possible ways to adapt the regulatory framework to the shift from DB schemes to DC schemes, with the consultation paper identifying the main risks that members may face in accumulation.

The authority’s draft advice also touched on the sustainability aspects of the fiduciary duties and stewardship rules of IORPs, and the prudential requirements to include diversity and inclusion issues in relation to management bodies.

Stakeholders have until 25 May 2023 to provide feedback to the consultation paper.

Share Story: