View more on these topics

NAPF warns Solvency II for pensions is far from dead

Barnier: Said in May he would not include reforms to the pensions funding regime

The National Association of Pension Funds has warned controversial EU proposals to impose Solvency II-style funding requirements on UK pension schemes are “not dead”, with European regulators keen to resurrect them. 

In May, European Commissioner Michel Barnier confirmed he would not include reforms to the funding regime for pension schemes in forthcoming changes to the Institutions for Occupational Retirement Provision, or IORP, directive. 

There had been fears the proposals, which would have forced defined benefit schemes to hold extra capital in reserve, would cost UK scheme sponsors £450bn.

Barnier said the Commission will instead focus on reforms aimed at improving governance, transparency and reporting requirements in occupational schemes and will carry out further research on the merits of increasing capital requirements for pension funds.

However, speaking at the Money Marketing Retirement Planning Summit in Cork last week, NAPF EU and International policy lead James Walsh said officials at Eiopa, the European pensions regulator which advises the Commission, remain intent on reforming the pensions capital regime.

He said: “The Solvency II funding proposals are not dead yet, they are only being shelved. I was in Frankfurt last week talking to some Eiopa officials and they said it will definitely happen.

“It will be up to the next EU Commissioner to make that decision but Eiopa are clear that they want to see this regime introduced.”

Walsh also warned the proposed changes to the IORP directive could have implications for defined contribution pension schemes, which could be required to hold extra capital to cover “operational risks”.

He said: “There are also issues for defined contribution schemes. There is a little known but important proposal that DC schemes will be made to hold extra capital against ‘operational risk’.

“That will be a significant extra cost and I am surprised there hasn’t been more debate about it.”


Emma Simon MM blog

Emma Simon: Political tinkering with pensions will cause real trouble

The phrase “a politician’s promise” is fast-becoming an oxymoron, at least when it comes to pensions. In last week’s debate on the pension bill, it emerged that the much-lauded “triple lock” on state pensions can’t be guaranteed beyond the next election. In fact, when you dig a bit deeper it emerges that this “triple lock” […]

Govt pledges to oppose EU fund manager bonus cap

The UK has pledged to oppose EU proposals to cap fund manager bonuses in the same way as bankers. In March, the economic and monetary affairs committee voted to cap fund manager bonuses at 100 per cent of their salary with half being paid in shares in the funds they manage. The move is fuelled […]


IMA: Use of plain English is key

Simple, clear, transparent, honest, trustworthy – familiar and frequently used terms in the strategic thinking and communications objectives of many financial services organisations. Connecting with customers is crucial to the future reputation of the industry. But what does that mean in practice? Clarity for one group of customers can be confusion for another. In the […]


OFT refers payday loan sector to Competition Commission

The Office of Fair Trading has decided to refer the payday lending sector to the Competition Commission over concerns about “deep-rooted” problems with the way lenders compete with each other. The OFT announced its provisional decision to refer the market to the CC in March and carried out a public consultation. Following the consultation, it […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers. Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm