PensionsEurope & AEIP input to EIOPA on methodological framework for stress testing IORPs

PensionsEurope & AEIP input to EIOPA on methodological framework for stress testing IORPs

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.