Many European pension funds would like to have more tailor-made, sectoral regulations amid increasing amounts of regulation for financial institutions bringing pension funds into scope, according to PensionsEurope CEO, Matti Leppälä.

Speaking at the European Pensions Annual Conference 2023, Leppälä stated that there were big political policy agendas that will lead to legislation that is also applicable to pension funds.

He pointed to the upcoming revision of the Sustainable Finance Disclosure Regulation (SFDR), the ongoing debates about the Corporate Sustainability Due Diligence Directive (CSDDD), ESG rating issues, and greenwashing issues as examples.

“Looking at these really big policy issues, the digital agenda, the green transition agenda, and everything that comes down as regulation; what is really challenging for pension funds is the fact that we are increasingly in scope of all of this horizontal legislation,” he stated.

“Many pension funds would like to have their own sectoral legislation. But this is not the case. Everything that is relevant to financial services, and pension funds are seen as financial services.

“It’s really difficult to get out of this, or even to have specific, tailor-made rules for pension funds. That is the direction that the European legislature is taking.”

Leppälä added that there is a lot of frustration amongst the financial services industry with the amount of regulation that has been put in place and is being prepared.

“We and other trade associations going to next year’s election will again argue that there is too much regulation, it’s harmful and it’s not consistent etc.,” he revealed.

“But this machine keeps coming up with new regulation.”

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