EIOPA has submitted its technical advice to the EC regarding the review of the IORP II Directive, ensuring that the revised directive can adapt to the future while safeguarding the existing framework.
This advice builds on previous decisions, opinions, and reports from EIOPA and takes into account feedback received during public consultations (eventid=20022) and a comprehensive survey among national supervisors. It responds to a call for advice from the EC, addressing various aspects of the IORP II Directive, like governance and prudential standards, cross-border activities and transfers, information to members and beneficiaries and other business conduct requirements, the shift from DB to DC, sustainability, diversity and inclusion.
The paper explores several options to enhance proportionality in the IORP II Directive, with a focus on liquidity risk, conflict of interest, effective use of data, and standardised risk assessment. EIOPA emphasizes the importance of adapting the IORP II Directive to the changing landscape of occupational pensions, including the shift towards DC schemes and challenges like an aging population, pension disparities, and climate change.
The proposed changes to the regulatory framework aim for IORPs to remain relevant amid the transition from DB to DC pensions. This also involves addressing environmental and socio-economic challenges, including transparency of costs, charges, and sustainability in investment decisions. EIOPA recognizes the need for proper regulation and supervision of existing DB IORPs, especially considering solvency and liquidity risks, particularly in light of events in the UK in the fall of 2022 related to IORPs with derivative hedging positions.
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