AEIP responds to the EIOPA’s consultation on the supervisory reporting of costs and charges of IORPs
AEIP responded to the EIOPA’s consultation on the supervisory reporting of costs and charges of IORPs. Overall, AEIP agrees with cost transparency and comprehensive cost reporting as an objective of the management board of the IORP and/or the negotiating social partners in the setup of a pension scheme, however this objective should not cause more transparency costs than transparency value. Extensive cost communication to the members and beneficiaries should be limited to pure DC schemes with investment options where costs are borne by the members. Clear definitions of cost, a general classification, principles for compilation and templates might be useful to facilitate this communication and reporting purposes. Nevertheless, for EIOPA and NCAs, a high-level cost overview should be sufficient. Hence, AEIP does not agree with cost transparency and comprehensive cost reporting as an objective of EIOPA nor of the NCA to make an in-depth cost analysis, a benchmarking exercise and/or a cost evaluation with feedback to the IORP.
In addition, AEIP stressed that the suggested approach should appreciate more the social dimension of many pension schemes. In many member states, a pension scheme is not a “product” that is sold by a financial institution. Often the pension scheme is the result of negotiations with social partners. Once the pension scheme is defined these social partners either opt for an insurance solution or they set up a proper fully tailor made IORP. Given the tailor-made character, by definition, costs are incomparable. Importantly, the IORP only executes the pension scheme and the pensions fund´s only and main goal is to manage the pension scheme in the best interest of the members and beneficiaries. Social and labour regulation is in place to protect members and beneficiaries. That is in clear contradiction to commercial insurance products like those of insurance companies for example. The members of AEIP are not profit-oriented and not supposed to paying any bonuses to their managers. Their primary goal is providing good and safe pensions for our beneficiaries.
Please see here the full contribution of AEIP.