EUROPE – The chair of the European Insurance and Occupational Pensions Authority (EIOPA), Gabriel Bernardino, has stressed that the holistic balance sheet (HBS) within the revised IORP Directive is not “a dead-end street” in spite of the European Commission’s decision earlier this year to postpone pillar one of the same directive.

At a recent closed-door event in Brussels regarding quantitative impact studies for pensions, Bernardino justified in his opening remarks the decision to introduce an HBS approach in the revised IORP Directive.

The approach is, according to him, a way to capture “the wide variety of occupational pension systems in the different member states in a single, European prudential regime”.

He added that the approach would not interfere with national social or labour laws, or with the prerogative of employers or social partners to decide on the contents of pension funds.

“The holistic balance sheet allows pension funds to recognise the value of all security and benefit-adjustment mechanisms available to them,” Bernardino said.

“All in all, the holistic balance sheet is able to provide a comprehensive and comparable view of how far occupational pension promises are supported by financial assets, sponsor support and pension protection schemes, and how far benefit adjustments are expected to occur.”

However, Dave Roberts, a senior consultant at Towers Watson who attended the event, suggested that, considering the decision made by Michel Barnier, European commissioner for internal market and services, to postpone the introduction of pillar one of the revised directive, EIOPA’s commitment to the HBS approach was going down a “dead-end street”.

According to Roberts, Bernardino rejected the argument and said: “[The HBS] is precisely the way to deal with different regimes across multiple countries, but, if EIOPA discovers it needs another approach, that would not be a problem.”

Jung-Duk Lichtenberger, policy officer in the internal market directorate of the Commission, echoed Bernardino’s sentiments.  

“The QIS was a major achievement in itself, and impact assessment work is ongoing,” he said.

According to other sources attending the event, Bernardino was also questioned on the wisdom of continuing to work on capital adequacy now that the Commission had postponed the inclusion of the first pillar in the revised directive.

In response, Bernardino confirmed that the regulation that founded EIOPA gave it the power to advise on measures to ensure the sustainability of pension funds.  

Sources told IPE that Bernardino insisted that EIOPA had all the “legitimacy” it needed and wanted evidence on which to base decisions.  

He is also reported to have said EIOPA’s work to secure that evidence would continue.

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