2. European System of Financial Supervision

EIOPA revises work program for 2015

Due to a budget cut of 7.6%, EIOPA reprioritised the work program for 2015 (press release, new work program). The relevant points for occupational pensions include that a report on national initiatives improving financial literacy and an initiative on informed consumer choice were axed. The detailed tasks in relation to the delegated acts from the Commission’s IORP II proposals were also deleted, however, the main point and a reference to the pension benefit statement remains.

There were no changes relating to EIOPA’s work on the Holistic Balance Sheet approach. Similarly, there were no changes to the plan that the EU supervisory authorities will work together on the regulation of credit rating agencies (CRA III).


 

EIOPA publishes work programme

EIOPA has published its Work Programme for 2015 as well as its Multi-Annual Programme 2015-2017 on 1 October 2014. The annual planning round set five key goals:

  • “to ensure transparency, simplicity, accessibility and fairness across the internal market for consumers; 
  • to lead the development of sound and prudent regulations supporting the EU internal market; 
  • to improve the quality, efficiency and consistency of the supervision of EU insurers and occupational pensions; 
  • to identify, assess, mitigate and manage risks and threats to the financial stability of the insurance and occupational pensions sectors; and 
  • EIOPA to act as a modern, competent and professional organisation, with effective governance arrangements, efficient processes and a positive reputation.” 

These strategic goals are broken down into specific products. For 2015, more than a dozen of these products can be expected in the area of retirement provision. Both the quantity of products as well as the aim to achieve consistency between the insurance and pension sectors are remarkable from the perspective of occupational pensions.


 

European Commission publishes two reports on the European System of Financial Supervision

On 8 August 2014 the European Commission published two reports reviewing the functioning of the European System of Financial Supervision (ESFS). The reports are partly based on the consultation regarding the review of the European System of Financial Supervision, which was conducted between April and July 2013. The aba response was one of 94 responses received.

The first report assesses the work of the European Systemic Risk Board (ESRB – in charge of macro-prudential oversight); the second one addresses the European Supervisory Authorities (ESAs – three sectoral micro-prudential authorities: the European Banking Authority (EBA), the European Insurance and Occupational Pensions Authority (EIOPA), and the European Securities and Markets Authority (ESMA)). German Pensionskassen and Pensionsfonds are Institutions of Retirement Provision and fall under EIOPA’s scope, making the second report most relevant for occupational pensions.

The European Commission has a positive opinion of the undertaking by the ESA’s since they started their operations in January 2011. The following areas of the report are relevant for occupational pensions:

  • Extension of the scope of the ESAs
  • Regulatory process
  • ESA's right of access to data
  • Financing of the ESAs
  • Governance – Stakeholder Groups

A staff working document and other related documents can be found on the Commission’s website.


 

EIOPA Report on “consumer protection” in occupational pensions

At the end of June 2014, EIOPA published a Report on issues leading to detriment of occupational pension scheme members and beneficiaries and potential scope of action for EIOPA. The report sets out EIOPA’s strategy towards addressing consumer protection issues related to (occupational) pensions, it then describes the areas and topics in this field identified for future work by EIOPA and finally sets the priorities. EIOPA’s powers and scope of activity are governed by the EIOPA Regulation.


 

EP adopts Resolution on the European System of Financial Supervision (ESFS)

The EP adopted the Resolution on the European System of Financial Supervision (ESFS) Review based on the Report by Sven Giegold without further changes on 11 March 2014.


 

ECON Committee adopts Giegold Report on ESFS Review

The ECON Committee of the European Parliament who is leading on the topic has voted on the Draft Report by Sven Giegold and its many amendments on 12 February 2014. The Report was adopted with 33 votes in favour, four votes against and no abstentions. The Plenary will vote on the Report on 13 March 2014. The Report by the European Parliament was produced on the background of the review of the European System of Financial Supervision. Between 26 April and 31 July 2013 the European Commission ran a consultation on the topic (Review of the European System of Financial Supervision – ESFS, see below).

Overall assessment by the aba: the special characteristics of IORPs were not considered or even mentioned in the discussions. The call for the strengthening of consumer protection (also via the composition of the OPSG), more independence and resources for EIOPA and direct access to IORPs are likely to have a lasting impact for IORPs, such as a more EU-harmonisation, focus on consumer protection, “consistent” regulation of all “financial institutions” (including IORPs) and a secondary role of national legislators and regulators (in Germany: BaFin).

The aba-analysis (in German) looks at topics such as stakeholder groups, independence, financing and information requirements as well as tasks and objectives of the European Supervisory Authorities.  


 

Amendments to the EP Draft Report on the European System of Financial Supervision (ESFS) Review

After a consultation run by the European Commission until the end of June 2013 (see below), the European Parliament is now working on the Review of the European System of Financial Supervision. Sven Giegold (German MEP for the Group of the Greens/European Free Alliance), rapporteur in the responsible Committee on Economic and Monetary Affairs (ECON) presented his Draft Report on The European System of Financial Supervision (ESFS) Review in October 2013.

On 15 January 2014 334 Amendments were published relating to this report. Most of them come from the rapporteur Sven Giegold and Sharon Bowles (Liberals, UK). Burkhard Balz and Werner Langen (both CDU), Markus Ferber (CSU) as well as Wolf Klinz (FDP) contributed in addition to Sven Giegold from Germany. From the topics raised, the following ones are important for occupational pensions provision:

  • Stakeholder groups (including amongst others the Occupational Pensions Stakeholder Group)
  • More independence and more resources for ESAs (European Supervisory Authorities)
  • ESAs’ rights to request information
  • Objectives and tasks of the ESAs (mainly consumer protection)
  • Imbalances within the ESAs (mainly the growing influence of the banking supervision) and proposed merger in terms of location
  • Regulation of market participants 

 

EIOPA Regulation and composition of the OPSG

To facilitate the consultation of stakeholders, the EIOPA Regulation establishes two interest groups: the Occupational Pensions Stakeholder Group (OPSG) and the Insurance and Reinsurance Stakeholder Group (IRSG). Art. 37 of the Regulation states the different categories of representatives (representing in balanced proportions institutions for occupational retirement provision operating in the Union, representatives of employees, representatives of beneficiaries, representatives of SMEs and representatives of relevant professional associations as well as independent academics). In addition, „an appropriate geographical and gender balance and representation of stakeholders across the Union” has to be ensured.

The aba has pointed out on numerous occasions (including the consultation run by the Commission on the ESFS Review ending in July 2013) the inadequacies of Art. 37 of the EIOPA Regulation. First, employers, without whom there would be no occupational pension provision, should be mentioned in their own category. Second, the OPSG should mostly be composed of stakeholders from Member States which do rely on IORPs for their retirement provision. Others will not be able to provide the necessary expertise to further the development of IORPs.  

The members of the OPSG and IRSG were announced on 7th October 2013. 


 

Consultation on the Review of the European System of Financial Supervision

Between 26 April and 31 July 2013 the European Commission ran a consultation on the Review of the European System of Financial Supervision (ESFS). The questions related both to the system as a whole as well as looking at the efficacy and efficiency of the different authorities within the system. The European System of Financial Supervision was established in 2011 in response to the financial and economic crisis. The regulation establishing the ESFS includes provisions for the Commission to review its structure and its performance as a whole.

In our response we focus on the European Insurance and Occupational Pensions Authority (EIOPA), which is responsible for occupational pensions.


 

 

 

     

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