All News - Wealth Management News

UK pension industry worried by EU solvency plans

The European Insurance and Occupational Pensions Authority (EIOPA) last week made plans to implement Solvency II-style rules.

The proposals, known as the Occupational Retirement Provisions Directive (IORP), have led to concern from UK pension consultants.

The IORP proposes reforms to level the playing field of pension provision across European states but several UK bodies have expressed reservations about the proposals.

The National Employment Savings Trust's (NEST) chair Lawrence Churchill said:

"EIOPA's consultation could lead to a number of requirements that mean increased costs for defined contribution (DC) schemes such as NEST, including the potential requirement to hold additional capital against operational risk.

The Financial Reporting Council chief executive Stephen Haddrill added:

"The regulatory and professional framework for UK pension funds promotes high quality provision supported by good corporate governance and advice. The application of Solvency II requirements will make them far more expensive and risky for many employers leading to their early closure," he said.

It is estimated that if the proposals were implemented in their current form, they would add an extra funding burden of £600bn UK pension schemes.

For more information please contact Paul Bradshaw at McEwan Wallace Wealth Management on 0151 647 6682 or email enquiries@wallace.co.uk.