The European Insurance and Occupational Pensions Authority (EIOPA) has published its Supervisory Convergence Plan for 2022.

The plan outlines EIOPA’s priorities to enhance supervisory convergence over the course of the year, in line with its mandate to build a common supervisory culture and consistent supervisory practices in the European Union.

Its priorities revolve around three ‘main areas’: common supervisory culture and tools, risks to the internal market and level playing field, and supervision of emerging risks.

EIOPA will continue working on proportionality, supervisory assessments of conduct risks, environmental, social and governance (ESG) issues, and group supervision.

With regard to pensions in the area of risks to the internal market and the level playing field, which may lead to supervisory arbitrage, EIOPA will initiate work to establish and address supervisory concerns arising from the recent market development of multi-sponsor IORP providers.

It noted that the IORP II Directive provided minimum prudential requirements focusing largely on the traditional image of non-commercial purpose IORPs set up by a single sponsor or multiple sponsors of the same sector.

Although it acknowledged that multi-sponsor IOP providers had an “important role to play” to drive market consolidation and provide efficient, low-cost solutions in countries seeking to develop occupational pensions, they also bring new supervisory questions in respect of the governance and risk management.

“This work will include fieldwork to better understand providers’ different business models and NCAs’ supervisory practices in respect of these IORPs and will take into consideration the proportionality principle,” EIOPA stated.

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