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EIOPA consults on technical advice for the review of the IORP II Directive

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Summary

The European Insurance and Occupational Pensions Authority (EIOPA) has launched a public consultation on draft technical advice for the review of the IORP II Directive in response to a call for advice from the European Commission. The consultation covers six areas: governance and prudential standards, cross-border activities and transfers, information to members and beneficiaries, shift from defined benefit to defined contribution, sustainability, and diversity and inclusion. Stakeholders are invited to provide feedback to this consultation by responding to the online survey by 25 May 2023.

Q&As

What is the purpose of the European Insurance and Occupational Pensions Authority's (EIOPA) draft technical advice?
The purpose of the European Insurance and Occupational Pensions Authority's (EIOPA) draft technical advice is to provide advice to the European Commission in response to a call for advice.

What areas does the draft advice cover?
The draft advice covers the following areas: Governance and prudential standards, Cross-border activities and transfers, Information to members and beneficiaries and other business conduct requirements, Shift from defined benefit to defined contributions, Sustainability, Diversity and inclusion.

What are the aims of the draft advice?
The aims of the draft advice are to ensure that the regulatory framework is updated where necessary to embrace the future such as the shift from defined benefits to defined contributions and the challenges of climate change, and to protect the legacy, for example by addressing topics like risk assessment and liquidity risks.

What is the deadline for stakeholders to provide feedback?
The deadline for stakeholders to provide feedback is 25 May 2023.

What is the purpose of the consultation paper?
The purpose of the consultation paper is to invite stakeholders to provide feedback to the draft technical advice.

AI Comments

👍 This consultation paper is a great step forward towards updating the regulatory framework to embrace the future. The draft advice set out in the paper is a great way to ensure that the legacy is protected while addressing the challenges of climate change.

👎 The consultation paper does not provide enough detail on how sustainability, diversity and inclusion, and other key topics will be addressed. The short timeline to provide feedback by 25 May 2023 is also too short to give stakeholders enough time to provide meaningful input.

AI Discussion

Me: It's about EIOPA consulting on technical advice for the review of the IORP II Directive. The consultation covers a lot of important areas like governance and prudential standards, cross-border activities, information to members and beneficiaries, sustainability, and diversity and inclusion.

Friend: Wow, that's a lot. What do you think the implications of this consultation are?

Me: Well, it shows that the European Commission is taking steps to ensure that the IORP II Directive is updated to address current challenges, such as the shift from defined benefits to defined contributions and the challenges of climate change. It also shows that they are taking into account the risks associated with these changes, such as liquidity risks. Ultimately, this consultation could lead to improved regulation and better protection for members and beneficiaries.

Action items

Participate in the public consultation by responding to the questions in the online survey by 25 May 2023.
Research the topics covered in the consultation paper, such as governance and prudential standards, cross-border activities and transfers, information to members and beneficiaries and other business conduct requirements, shift from defined benefit to defined contributions, sustainability, and diversity and inclusion.
Stay up to date on the progress of the review of the IORP II Directive by regularly checking the European Insurance and Occupational Pensions Authority website for updates.

Technical terms

EIOPA: European Insurance and Occupational Pensions Authority.
IORP II Directive: The IORP II Directive is the second version of the European Union's Directive on Institutions for Occupational Retirement Provision.
European Commission: The European Commission is the executive branch of the European Union, responsible for proposing legislation, implementing decisions, upholding the EU treaties and managing the day-to-day business of the EU.
Defined Benefit: A defined benefit plan is a type of retirement plan in which an employer promises a specified monthly benefit on retirement that is predetermined by a formula based on the employee's earnings history, tenure of service and age, rather than depending directly on individual investment returns.
Defined Contributions: A defined contribution plan is a type of retirement plan in which the employer, employee or both make contributions on a regular basis. The contributions are invested, and the resulting balance is used to provide retirement income to the employee.
Risk Assessment: Risk assessment is the process of identifying, analyzing and responding to risks in order to minimize their impact on an organization.
Liquidity Risk: Liquidity risk is the risk that an organization will not be able to meet its financial obligations as they come due.