European schemes body confident of IORP climbdown

Matti Leppala, newly appointed chief executive of the European Federation for Retirement Provision, has claimed the Agenda for adequate, safe and sustainable pensions document gives him hope plans to introduce Solvency II to schemes will be watered down.

This contains a commitment to increase the percentage of European people’s retirement savings coming from private provision, rather than the state.

Leppala told PW he believes it is evidence the onerous capital requirements proposed in the Institutions for Occupational Retirement Provision (IORP) directive are being reconsidered.

“I believe the commission understands the problems this will pose and will consider that in their final policy,” he said.

The draft white paper seen by PW states: “Pension reforms already in place will, in a number of member states, result in lower replacement rates (pensions relative to previous earnings) from public schemes.

“While individuals may be able to compensate for this by postponing their retirement, complementary retirement savings [workplace and personal schemes] are also expected to play a greater role in securing adequate incomes in old age.”

Meanwhile the commission’s recent annual growth survey pledges to “respect national traditions of social dialogue to ensure the financial sustainability and adequacy of pensions”.