Improving European pensions statistics insights into EIOPA s initiative Barthold Kuipers Pensioenseminar 2018, Pensioen: Outside in, University of Maastricht 29 January 2018
What is EIOPA? European Insurance and Occupational Pensions Authority since 1 January 2011 Advisory body to the European Commission, accountable to the European Parliament and the Council of the European Union Represented by its Chairperson, BoS as decision making body Autonomous budget with revenues mainly from obligatory contributions from national supervisory authorities and EU s General Budget 2
EIOPA staff 147 staff members from 25 different countries: Male: 48.63 % Female: 51.37 % Staff (TAs+CAs) + SNEs *Yellow: Represented by EIOPA staff Blue: Not yet represented 3
European System of Financial Supervision European Systemic Risk Board (ESRB) macro view ECB Council (with insurance and securities alternates where necessary) + + + Chairs of EBA, EIOPA & ESMA European Commission Non-voting: Representative of the national supervisor(s) per Member State + EFC President European Supervisory Authorities and National Supervision micro view European Banking Authority (EBA) European Insurance and Occupational Pensions Authority (EIOPA) European Securities and Markets Authority (ESMA) Single Supervisory Mechanism / National BankingSupervisors National Insurance and Pension Supervisors National Securities Supervisors 4
Key objectives of EIOPA Stable/effective financial system (detection of risks) Sound regulation/supervision improving functioning of internal market Transparent, efficient and orderly financial markets Protection of policy holders / members and beneficiaries International supervisory co-ordination 5
EIOPA s powers Develop draft technical standards Issue guidelines and recommendations Developing Opinions addressed to the EU institutions Settle disagreements in cross-border situations In certain cases, remedy emergency situations (to temporary prohibit or restrict financial activities) Monitor correct application of EU law 6 6
EIOPA s mandate to collect pensions information EIOPA is required by its Regulation (EU) 1094/2010 to monitor and assess market developments with a view to: o detect emerging risks and threats of adverse developments which may seriously jeopardise the orderly functioning and integrity of financial markets or the stability of the whole or part of the financial system in the EU (Article 18), and o assess relevant micro-prudential trends, potential risks and vulnerabilities and their impact on potential market developments on the institutions with EIOPA's scope of competences (Article 32) National competent authorities shall provide EIOPA with all the necessary information to carry out the duties assigned to it (Article 35) 7
Timeline of pensions statistics initiative Since 2016 Development framework for European pension statistics in collaboration with ECB 26 July 2017 Public consultation reporting requirements (together with the ECB s draft Regulation) 27 October 2017 Deadline public consultation Q1 2018 31 December 2018 (being considered) H1 2019 (being considered) Finalisation reporting requirements Reporting requirements enter into force First reporting annual data end 2018 8
Objectives of the pensions statistics initiative Streamline and enhance efficiency of pension data requests from o departments within EIOPA, like financial stability and pensions policy o from European and international organisations, in particular the ECB, but also Eurostat and OECD Improve financial stability analyses ensuring a sound statistical basis 9
Streamlining pension data requests EIOPA makes separate data requests for different products: o o o o EU/EEA occupational pensions statistics Database of pension plans and products in the EEA Market development report on occupational pensions Consumer trends report ECB, Eurostat and OECD apply different sets of definitions and taxonomies Opportunity to align pension data requests: ECB project to improve pensions statistics and implement ESA 2010 o Consistent reporting in Euro-zone o New ECB Regulation 10
Improving financial stability analyses (1) European pension funds are key players on financial markets with total assets amounting to EUR 3,545 billion EIOPA s existing pension fund data is often: o difficult to obtain in a timely manner o incomplete, and o incomparable. EIOPA s work on financial stability comprises: o the identification of risks o the measurement of vulnerability to risks, and o an assessment of resilience at a system-wide level 11
Improving financial stability analyses (2) Enhancing analytical toolkit for pensions: Financial stability report (bi-annual) o Now largely devoted to insurance ( 90%) Risk dashboard (quarterly) o Now only for insurance Stress tests (biennial) o Both pensions & insurance Special thematic studies o e.g. investment behaviour 12
High-level data framework: key features (1) Scope: Institutions for Occupational Retirement Provisions subject to Directive (EU) 2016/2341 o where relevant, occupational pensions business of insurers, as defined in the IORP Directive Reporting requirements apply to relevant national competent authorities Mainly maintenance of streamlined aggregate data requests Reporting in line with ECB requirements (incl. Eurostat and OECD, where relevant) Full annual reporting, quarterly reporting for balance sheet and investment information 13
High-level data framework: key features (2) Reporting of individual IORP data (limited scope): o All IORPs above EUR 1 billion balance sheet total and o at least the biggest 5 IORPs per MS, unless the individual balance sheet total is less than EUR 100 million One single reporting template as far as possible for aggregate and individual IORP reporting Investment information o Asset-by-asset reporting o Look through for investment funds Distinguish investments and technical provisions by DB, DC, hybrid o OECD's definitions of DB, DC and hybrid schemes 14
High-quality data framework: three main information areas Balance sheet information o Key balance sheet items, in line with ECB s requirements and based on current reporting to EIOPA o Maintain breakdown of investments - link to asset-by-asset reporting and look-through for investment funds o Market value for assets & national standards or local GAAP for technical provisions and reserves Inputs and assumptions used for valuations o especially for technical provisions, like discount rates and member statistics Flow data o enhanced flow data on contributions and benefits o maintain simple breakdown of investment income and expenses 15
Public consultation 28 respondents: mainly from the pensions sector General support for: o improving pensions statistics, and o cooperating closely with the ECB ideally to achieve one reporting template Concerns raised: o Implementation timeline too ambitious o Exemptions needed for small IORPs o Split of assets by DB, DC and hybrid not feasible o Justification for individual IORP data o XBRL: costly burden 16
Considering the consultation feedback Proportionate approach to very small IORPs Using ISIN code to streamline asset-by-asset reporting Review data on derivatives, real estate investments and hedge funds (in line with ESRB and ECB requirements) Align first-time reporting with ECB 17
Thank you Barthold Kuipers email: barthold.kuipers@eiopa.europa.eu