The Dutch pensions federation – Pensioenfederatie – has come out against increasing the threshold for pension funds to be regulated by EIOPA to 1,000 members or €50m in assets.
The Pensioenfederatie believes such a change would make the IORP II Directive “quickly lose its legitimacy” as it would continue to apply only in a minority of EU Member States if the threshold is increased as proposed.
“We are concerned if the number of Member States that have an interest in the IORP directive would be considerably reduced. An IORP directive that applies only in a minority of Member States that have both well-developed occupational pensions as well as large IORPs, would quickly lose its legitimacy. The subsidiarity principle would kick in and suggest that large IORPs should then be regulated at the national level,” the umbrella organisation for Dutch pension funds wrote in its consultation response.
Its criticism echoes concerns voiced by its German sister organisation Aba which said last month that lifting the threshold was “not in the interest of IORPs in Germany”, as 30-45% of the country’s occupational pensions institutions would fall below the new limits.
Europe-wide, this number could well be even higher, according to the Pensioenfederatie.
The Dutch and German concerns contrast with the views of European umbrella organisations PensionsEurope and AEIP, which both have come out in support of an increase of the minimum thresholds.
Back in April, AEIP told IPE it feared an increase in costs for small and medium-sized pension funds if the current 100-member exemption threshold remains in place.
Subsidiarity principle
The Pensioenfederatie also said it is against the creation of a “low-risk category” of IORPs with less-strict regulatory requirements.
“This should be a sliding scale, instead of a binary approach,” it said. The federation is concerned that so many funds would eventually be exempted from the strictest supervision requirement that the “higher-risk category” would in practice only comprise pension schemes from a handful of member states.
“We feel that such an outcome would violate the subsidiarity principle. Occupational pensions and IORPs are very important in the Netherlands. It would not be politically viable to come to an outcome in which the EU sets rules that only apply in the Netherlands and perhaps a few other Member States, which takes away competence from for instance the Dutch parliament,” the Pensioenfederatie said.
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