Pension stakeholders in the UK breathed a collective sigh of relief yesterday when the European Commission abandoned its plans to apply Solvency II-style insurance regulations to defined benefit pension funds.
Trade unions had strongly opposed the Commission’s plans – as had employers, the industry and the government. We opposed the plans in principle, because the Commission had seriously misunderstood the nature of UK pensions provision, and our protection regime, and over-estimated the feasibility of cross-border provision. And we opposed them on practical grounds after an initial impact study by the European Insurance and Occupational Pensions Authority (EIOPA) indicated possible solvency requirement costs of £400 billion for UK pension funds.


