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The Actuary The magazine of the Institute & Faculty of Actuaries

EIOPA consults on application of Solvency II to pensions

This consultation looks at how elements of the Solvency II 
regime to be introduced for insurers could be adapted for use in regulating occupational pension schemes.

Among other things covered in the 
517-page, 96-question consultation is 
a recommendation to move to market-consistent valuations, and proposals that a financial value is put on employers’ covenant and included in the assessment of capital available to the scheme.

Members of the Pensions Practice Executive Committee (PPEC) and other volunteers are working hard to collate initial views and feed them back to EIOPA by the 2 January deadline.

Huw Evans, chair of PPEC, said: “Revisions to the Pensions Directive could have a huge impact on UK pensions and, while the direction of travel as proposed seems fairly clear, UK actuaries working together with colleagues from across Europe have a big part to play in making any proposals workable. It is vital that the European Commission and Member States recognise the substantial differences between insurance contracts and pensions promises given by employers and learns from the emerging experiences of Solvency II in the insurance industry.”