PensionsEurope welcomes the opportunity to comment on the EBA consultation about its draft Regulatory Technical Standards (RTS) on Initial Margin Model Validation (IMMV) under the European Markets Infrastructure Regulation (EMIR). It is PensionsEurope’s opinion that the suggested RTS regarding the adoption and governance of IM models will introduce new heavy and unjustified burdens on a vast number of counterparties and we believe that the proposed requirements overshoot what’s necessary in order to curb risks to the financial system arising from IM calculations.
We therefore suggest removing the article 2, 2. option or, at least, to provide clearer and more objective criteria for requiring section 3 compliance from counterparties above the EUR 50 billion threshold. You can read our comments here.
PensionsEurope welcomes the opportunity to comment on the IFRS consultation regarding the developing disclosure requirements and proposed amendments to IFRS 13 and IAS 19. PensionsEurope believes that the note disclosures with regards to pension plans are already very comprehensive in current annual financial statements. Most of the information disclosed in the notes already covers the proposed disclosure objectives. For this reason, it is unclear how the new concept should better meet the users' needs. Furthermore, PensionsEurope believes that any structured disclosure process needs checklists to decide which information will not be provided due to materiality reasons. Therefore, a checklist approach has its advantages You can read our answer and explanation here.
On 16 December 2021 PensionsEurope answered to the ESAs’ Call for evidence on the European Commission mandate regarding the PRIIPs Regulation advocating that the scope of the PRIIPs Regulation should not be extended to pension products. You can read our answer and explanation here.
On 1 December 2021, PensionsEurope hosted its webinar Investing in the Future as part of the inaugural European Retirement Week (29 November - 3 December), an initiative by 11 European associations to provide a platform for a wide range of stakeholders to debate the future of pensions in Europe and to raise citizens’ awareness of the need to save for retirement. Pension adequacy is crucial to address Europe's savings gap and one of the first steps to achieve this is to raise public awareness of the need for long-term savings and returns.
During the seminar, PensionsEurope built on its programme "Investing in the Future", that was created earlier this year and launched at the PensionsEurope annual conference 2021, and stimulated the debate on pension oppoortunities and planning, alternative investments and the challenges and trends for 2021 and beyond. In a second session, we learnt more about Pension Tracking Services (PTS) and Dashboards, with EIOPA sharing how these could be developed and a case study on PTS from Sweden, followed by a panel discussion.
Today, the PensionsEurope Board of Directors accepted Insurance & Pension Denmark as its newest member. Insurance & Pension Denmark is the trade association of insurance and pension companies in Denmark. They represent about 80 insurance and pension funds in the Danish market and play an important role in solving the challenges of the welfare state by supplementing public welfare provisions. The Danish pension funds hold more than € 500 billion in investments in Denmark and abroad. Read more in our press release here.
In its feedback to the European commission, PensionsEurope welcomes the Commission’s roadmap on the new EU system for the avoidance of double taxation and prevention of tax abuse in the field of withholding taxes (WHT). We support the current Commission´s mandate call for removing all barriers to the completion of the Capital Markets Union (CMU) – particularly in the field of simplifying taxation.
PensionsEurope agrees with the objective that a standardised relief at source system becomes the principal mechanism for WHT relief procedures and their streamlining. We have stressed for a long time that the relief at source is the best practice for pension funds. We warmly welcome the action of the Commission ‘Action Plan for fair and simple taxation supporting the recovery strategy’ to introduce a common, standardised EU-wide system for withholding tax relief at source.
However, there are also many other recent WHT proposals which the EC should thoroughly consider. PensionsEurope has proposed to the Commission to establish an EU tax register of recognised pension institutions in order that Member States can reciprocally and automatically recognise pension institutions. Furthermore, in many countries pension institutions invest cross border via specialised investments funds and/or vehicles to increase the economies of scale, and it is important to ensure a tax-neutral treatment of these investment structures as well.
Today, PensionsEurope sent a letter to Commissioner Mairead McGuinness on pension scheme arrangements' (PSAs) clearing with the UK CCPs. In that letter, PensionsEurope requested the Commission to grant one year extension to the current equivalence decision in relation to UK CCPs. In exchange, PSAs are willing to continue actively reducing their exposures to UK CCPs, and open and hold active accounts within the EU based CCPs. You can read the letter here.
In the joint stakeholder feedback by PensionsEurope & AEIP to EIOPA Discussion Paper on a Methodological Framework for Stress-Testing IORPs, we make recommendations on the toolbox of common methodological principles and guidelines but also suggestions for its use in the next IORP stress test exercise in 2022. We support the consideration by EIOPA of the creation of a toolbox and believe that it can allow introducing further proportionality and create a better cost-benefit ratio by considering the specific pension scheme/IORP characteristics in different Member States.
In general, we welcome the EIOPA paper as it recognises the heterogeneity of the IORP sector, the important characteristics of IORPs, and multiple and various criteria for future IORP stress tests. Particularly we support developing cash flow analysis further, as cash flows are the starting point of many tools. For almost all methods mentioned in the EIOPA paper, IORPs would have to use the underlying cash flows to perform the calculations.
PensionsEurope welcomes the opportunity to comment on the consultation regarding the EFRAG Due Process Procedures on EU Sustainability Reporting Standard-Setting.
The European Commission’s proposal for a Corporate Sustainability Reporting Directive (CSRD) envisages the adoption of EU sustainability reporting standards (ESRS). The proposal for a CSRD requires that EFRAG’s Technical Advice is prepared with ‘proper due process, public oversight and transparency, and with the expertise of relevant stakeholders.
Climate change is a pressing political issue that requires swift political action. We note that this urgency is reflected in the consultation paper as well. However, we would like to stress the importance of leaving stakeholders sufficient time to respond to public consultations.
Moreover, the development of sustainability reporting standards is linked to the development of the European Single Access Point. Content-wise, the two projects should be consistent. As a result, we expect regular exchanges ensuring this consistency as well as reaping synergies in the process of developing the future EU Sustainability Reporting Standard. Read our response here.
PensionsEurope welcomes the European Commission’s initiative to assist the EU and Member States in monitoring the adequacy and sustainability of pension systems at macro-level through the development of a pension dashboard. We also support the development of national PTSs and the European Tracking Service project, as we believe that the PTS can be a very powerful tool to make people aware of their financial situation for the old age and can help them to take the right financial decisions. We stress that the PTS is one important element in a retirement system, and it should of course be accompanied by other measures fostering good retirement provisions.