The Directive introduces a wide range of new requirements on pension scheme governance and communications to members.
“Whilst the NAPF strongly supports initiatives to ensure that pension funds are well run, this new Directive simply adds further costs and administrative burdens without delivering practical benefits for members,” said chief executive Joanne Segars.
“The new Directive is not accompanied by an impact assessment, but the EC’s briefing papers estimate the one-off implementation costs of the new Directive at €22 ($30) per member – a cost of around £328m ($545m) for UK private sector schemes – with a further £7.5m per year in annual recurring costs.”
“The NAPF is deeply concerned by the lack of rigour behind the new IORP Directive proposal, particularly the absence of an approved impact assessment. EU interventions can have major ramifications for pension schemes and it is important that their effects are thoroughly considered to get it right.”
The chief executive of PensionsEurope, Matti Leppala said that organisation was also concerned about costs arising from Iorp II.
“For example, the pension benefit statement, which requires IORPs to provide a pension benefit statement for individuals every 12 months and free of charge, will drastically raise costs in some member states without sometimes bringing real added value to members and beneficiaries. We therefore need an adaption of the information requirements based on the pension promise given.”
DB, DC and hybrid schemes bring different benefits, choices and risks to the members and this needs to be taken into account, Leppala added. “Unnecessary costs must be avoided. Any extra costs will be paid by the members and the beneficiaries. In general, it is important to respect diversity of occupational pensions in the EU and keep in mind that Iorp II is supposed to be based on a minimum harmonisation approach.”