European Commission indicates Solvency II climbdown

The body is writing up a final version of the Institutions for Occupational Retirement Provision (IORP), a bill to go before the European Parliament aimed at rationalising workplace pension rules.

The most controversial aspect of IORP has been forcing pension schemes to adhere to SII a set of rules governing European insurers, which includes stringent funding requirements.

This has been subject to a consultation from the European Insurance & Occupational Pensions Authority (EIOPA), which will publish policy recommendations for the commission on February 15.

But the publication of a wider-ranging set of proposals for pan-European pension law from the commission should be seen a day earlier.

The latest draft of this document, seen by PW, offers support for applying certain qualitative parts of SII such as new governance requirements to pension schemes.

But it makes no mention of the 'quantitative' aspects of the policy, specifically funding levels, which has been the main sticking point for pension and sponsor representatives in the UK.

It states: "The right approach needs to focus on the nature and duration of pension liabilities, taking account of the additional risk-mitigating security mechanisms available to pension funds.

"The European Parliament considers that the qualitative elements of Solvency II form a valuable starting point for enhancing the supervision of IORP."

The National Association of Pension Funds' senior policy adviser James Walsh said: "Ultimately it's the commission's decision, so this is reassuring. But we're not expecting EIOPA's position to change much from its original one [in favour of SII funding levels for schemes]."