The National Association of Pension Funds (NAPF) has commented on the new EU Pensions Directive (Directive on Institutions for Occupational Retirement Provision), which was recently published by the EU Commission.
NAPF stated that the Directive introduced a range of new requirements related to pension scheme governance and communication.
NAPF Chief Executive Joanne Segars said that whilst the organisation strongly supports moves to help ensure pension schemes are run well the new Directive simply adds to the burden of cost and administration, and at the same time fails to deliver any practical benefit to members.
She criticised the lack of an accompanying impact assessment, and cited the estimated one-off cost for UK private pension schemes of £328m, with an additional recurring cost of £7.5m each year.
Segars warned that intervention by the EU could have significant ramifications on pension schemes, and said that their effects should be considered thoroughly to ensure the change is for the better.
In addition, the NAPF warned that the new standardised EU-wide ‘Pensions Benefit Statement’ does not take into consideration the wide variety of pension schemes in the EU.
The organisation also stated that the ‘Risk Evaluation for Pensions’ report would simply mean good pension schemes duplicating risk assessments they already conduct.
However, the NAPF was not entirely critical, and described the requirement for professional trustee qualifications as a step in the right direction, albeit one that should be amended in view of progress made by the UK in the area.
NAPF’s EU and International Policy Lead James Walsh said that it was good that the EU recognised the role pension funds play as long-term investors, and called on the EU to work with national governments.