In our input to the European Commission, PensionsEurope supports a balanced approach to the convergence of capital market supervision. PensionsEurope believes that a vibrant Capital Markets Union, which provides European pension funds with long-term investment opportunities to achieve good returns for members and beneficiaries, requires robust supervision of market participants. Occupational pensions are still very divergent across member states, both in terms of their prevalence and design. They are closely linked to first pillar pensions, as well as social and labour law more broadly. Importantly, the strong link between occupational pensions and national tax and labour law has resulted so far in relatively limited cross-border activities of IORPs. For these reasons, the rationale for a bigger regulatory or supervisory role for EIOPA on IORPs is absent. Nonetheless, we have seen a clear impact of EIOPA on the regulatory framework. Both EIOPA’s own Opinions and its work on Level 2 in the area of insurance have a significant impact on the supervisory activities of National competent Committees across Europe.Finally, since its inception, the mandate of ESMA has been expanded significantly, particularly in areas with strong financial stability or cross-border aspects. Pension Funds have supported the strengthening of this mandate.However, PensionsEurope believes that ESMA faces challenges due to the EU framework’s persistently poor design.
In its position paper, PensionsEurope welcomes the efforts of the EU to increase the digital operational resilience of the financial sector and we recognise the importance of enhancing knowledge sharing and cooperation across the EU. We agree with the importance of a sound governance and risk management system to prevent and limit the impact of ICT-related incidents, disruptions, and threats.
We recognise that the financial sector is not homogeneous: as also the EC has correctly noted, significant differences exist between various financial entities in terms of size, business profiles and in relation to their exposure to digital risk meaning that also the consequences from cyber risks and ICT-related incidents faced by various financial entities differ greatly from one entity to another.
PensionsEurope believes that it is crucial that the specificities of IORPs are better reflected in the DORA requirements and that IORPs could at least benefit from a more proportional treatment in this context, thus not jeopardizing the societal goal of IORPs to provide an adequate pension income for their members and beneficiaries.
In our input to the European Commission, PensionsEurope supports the Commission’s objective to simplify the life of taxpayers operating in the single market and we welcome the review of the VAT rules. In general, we believe all pension fund participants should be protected from unnecessary VAT burdens, regardless the character of the schemes as well as the Member State in which the services are being received. The current exemption for special investment funds should be extended to all pension schemes.
Even though the VAT exemption is in place, in some countries there is a stamp duty (for instance 4%) that is not subject or exempt from VAT and there is no possibility of any deduction. We urge the EC to recommend Member States to exempt (at least) pension schemes from this duty (or decrease their duty to no more than 1%).
Finally, we believe that establishing a cross-border investment-friendly tax environment in the EU not only requires removing unfair tax treatment but also introducing tax incentives.