Proposals to fund the European Insurance and Occupational Pensions Authority (EIOPA) through a levy on pension funds are likely to go ahead according to the UK’s industry association.
The National Association of Pension Fund’s (NAPF) policy lead for the European Union, James Walsh, said EIOPA had long since been making a case for its own funding stream and momentum behind the idea was building.
He said the association was unlikely to be able to fight off the idea and instead will look for concessions elsewhere.
EIOPA is currently funded directly by the EU budget – and in turn taxpayers – and through grants from regulators in individual member states.
However, since 2013, suggestions and plans have begun forming around independently funding the European Supervisory Authorities (ESA), of which EIOPA is one.
In May last year, chairman Gabriel Bernardino said the European regulatory system could be strengthened by more operational independence for authorities, particularly through an independent budget.
This was followed by members of the European Parliament’s economic and monetary affairs (ECON) committee backing Bernardino’s call, suggesting market participants should fund market supervisors.
In a report published last month, the European Commission announced an investigation into the possibility for ESAs to no longer be funded through the EU budget and national regulators as increased mandates and staffing levels meant this was unsustainable.
Walsh said incrementally momentum was building up with a levy on European pension schemes to fund EIOPA a likely option.
“We will end up with a levy,” he said. “It will be difficult to resist, and it may be one of the occasions where the NAPF, rather than just saying no and then losing the argument in the long-run, asks what funds can get back in return.”
Walsh said the NAPF would look to extract concessions for UK pension funds by aiming to reduce levies paid to the UK Pensions Regulator.
These levies currently indirectly fund EIOPA’s operations.
The Commission paper also suggested the potential merger of EIOPA’s two insurance and pensions stakeholder groups into one outfit.
Walsh said this would increase the likelihood insurance policies were then simplistically applied to occupational pensions.
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