Occupational pensions stress test 2017

Objective

Stress tests are an important supervisory tool to provide insight into the risks and vulnerabilities of the European occupational pensions sector. They contribute to the stability of the financial system and the European economy and enhance the protection of pension scheme members and beneficiaries.

The 2017 exercise is designed to assess the resilience of the European occupational pensions sector to an adverse market scenario using common methodologies. It will also analyse how IORPs transfer shocks, resulting from the impact of the adverse market scenario, to the real economy and financial markets.

Scope

The stress test is a European-wide exercise, covering both defined benefit (DB) schemes and defined contribution (DC) plans. The exercise includes all countries with material IORP sectors, exceeding EUR 500 million in assets. The relevant national supervisory authorities (NSAs) will identify and contact the respective participants.

Stress test results

The stress test results show that European Institutions for Occupational Retirement Provision (IORPs) providing defined benefits and hybrid pension schemes have, in aggregate, insufficient assets to cover their liabilities. The exercice also highlighted that vulnerabilities could spill-over to the real economy either through the adverse impact on sponsors and/or on beneficiaries through benefit reductions.

To learn more, please read:

• The full report of stress test results
• The presentation of the results by Gabriel Bernardino

Questions and answers on the stress test 2017

A centralised Q&A process is available until the 5 of July to support only participating IORPs in the stress test to interpret correctly the specifications and the reporting templates. For any queries related to this exercise, please fill in the template and send it to your NSA. The template and the email addresses of the NSAs can be viewed in the download section under "Questions & Answers on the Stress Test 2017".

Working process​

The exercise was conducted in close cooperation with the NSAs which are the direct contact point for the participants in the stress test. 
Between 30 March and 13 April EIOPA collected input from EU pensions stakeholders (see the informal consultation in the download section under "Background documents") including EIOPA’s Occupational Pensions Stakeholder Group on the draft stress test package. Stakeholders were asked to provide technical feedback to enhance the clarity of the specifications, questionnaires and spreadsheets as well as to identify inconsistencies. EIOPA invited the EU pensions stakeholders to discuss their feedback during a meeting on 19 April 2017 held at EIOPA’s premises.

Supporting documents