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17th June 2012

EIOPA requests feedback on technical specifications of IORP quantatative impact study

The European Insurance and Occupational Pensions Authority (EIOPA) hass invited all the interested parties to provide their feedback on the technical specifications for the quantitative impact study (QIS) of EIOPA’s Final Advice to the European Commission. The Advice is related to the review of the Directive on the activities and supervision of institutions for occupational retirement provision (IORP Directive).In its advice, which was submitted to the European Commission on 15th February, EIOPA proposes the holistic balance sheet as a means to achieve the Commission’s objective of a harmonised prudential regime for IORPs.
The advice recognises the importance of performing a QIS and remains conditional on the results of the QIS. It was emphasised that the feasibility of implementing the holistic balance sheet in practice and introducing a common level of security needs to be further investigated.
The QIS will only assess the financial impact on IORPs of valuing assets and liabilities on the holistic balance sheet and introducing a solvency capital requirement(SCR)under the various policy options in EIOPA’s advice. However, the results will feed into the European Commission’s impact assessment of all costs and benefits accompanying its legislative proposal.
The aim of the technical specifications is to provide guidance to IORPs participating in the QIS to perform the necessary calculations. Particular attention has been paid to the valuation and risk-mitigating effect on the SCR of the adjustment and security mechanisms IORPs dispose of, i.e.
conditional and discretionary benefits, “last resort” reductions of benefits, sponsor support and pension protection schemes.
The consultation paper is a first step towards the actual QIS exercise.
Following the public consultation, EIOPA will send a revised version to the European Commission for its consideration. The QIS exercise is expected to take place from the beginning of October until mid-December 2012.
The consultation will end on 31st July 2012.