ERM for Pension Funds [17]

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Bullet points include: EU Commission proposed a new EU IORP Directive, borrowing from Solvency II (perhaps because some IORPs are regulated like insurers). Initial proposals criticised by industry and by some influential governments. "If system isn't broken then why fix it?" Social policy is reserved to member states. Pillar 1 suggestions particularly contentious - both magnitude of impact and challenge of valuing important balance sheet elements like sponsor covenant. Pillar 1 proposals largely dropped for time being, but EU central bodies  still enthusiastic for enhanced Pillar 2 disciplines (ORSA, ERM, …) Problem: sponsor covenant still a very important risk for some IORPs. EIOPA consulted on sponsor support technical specifications in 2013 and is expecting to issue a further consultation paper at the end of Q3 2014

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