European Commissioner Michel Barnier has announced a delay to the timetable to apply Solvency II rules to UK pension schemes, but “insisted” they will be included
EUROPEAN COMMISSIONER Michel Barnier has announced a delay to the timetable to apply Solvency II rules to UK pension schemes, but “insisted” they will be included.
In a speech in Amsterdam on Friday, the EU commissioner for internal market and services said revisions to the Institutions of Retirement Provision Directive will not be tabled until summer 2013, instead of the end of 2012, Accountancy Age’s sister publication Professional Pensions reports.
Barnier (pictured) said it was important to conduct “first-rate quantitative impact assessments” to take into account the differences between pension systems across Europe.
The UK industry has raised concerns that the introduction of insurance solvency rules for schemes would impose huge costs and force more defined benefit schemes to close.
Pensions minister Steve Webb has described it as a “nightmare scenario” for the industry (PP Online, 15 December 2011).
But the Commissioner said schemes should face the same regulation as insurance companies to “maintain a level playing field”.
He said: “If we do not start the necessary reforms today, there will be no guarantee that the occupational pensions paid out in 10 or 20 or 30 years will be adequate. This is a matter of our common responsibility towards future generations.
“I believe it is important in regulatory terms to maintain a level playing field between insurance companies and pension funds when they supply similar and interchangeable products. I do not wish to penalise either of them.”
Barnier added: “We must remember that an occupational pension scheme is not an insurance policy. However, insofar as the risks underwritten by an insurance company or a pension fund are the same, I think the prudential rules should also be the same. This is necessary so as not to promote regulatory arbitrage in the single market.”
The Commissioner also outlined a delay to the implementation of Solvency II for insurance companies until 1 January 2014.