EIOPA Report on costs and charges of IORPs OPSG meeting Frankfurt, 10 March 2015

2 Original goals costs and charges project Started as fact-finding exercise to “unravel the different categories that comprise the totality of costs and charges borne by members and beneficiaries, consider definitions and work towards uniform ways to quantify them” Project covers DB and DC occupational pension schemes 26 countries participated

3 Interim conclusions – focus of exercise changed Lack of detailed information and practical experience among some Member States as regards the detail of costs and charges Regulation requirements as regards costs and charges vary widely among Member States and are in some cases not comprehensive or absent altogether Important findings: Pension scheme members and number of National Competent Authorities cannot always accurately assess if pension schemes offer value for money (DC) or are affordable (DB)

4 Conclusions report Costs and charges should receive increased, specific attention Costs and charges should be considered in context of contributions, risks and the performance of investments (‘overall approach’). With regard to costs and charges:  Goal should be to disclose all costs and charges so that: -Parties bearing costs and charges can assess if costs and charges paid represent good value for money and; -all parties can better exert market pressure on costs.  Ensure that NCAs have effective means to assess how costs and charges affect value for money or the affordability of pension schemes With regard to ‘overall approach’  Further work needed to identify other relevant information elements

5 Link to TFPP work on personal pensions Costs and charges report (also for DC schemes): oInformation on costs and charges not always detailed and complete oCosts and charges to be considered in context of contributions, risks and the performance of investments TFPP work will focus on DC-like Personal Pension Products (PPPs) Disclosure for PPPs: Besides costs and charges  TFPP will investigate if and how to best disclose other relevant information (investment risk indicators, return) that will not lead to information overload Goal: Max should be able to asses if ‘it pays to save’ / assess the value for money PPP offers

Thank you Cees Karregat Senior expert on pensions EIOPA