Question ID: 343
Regulation Reference: (EU) No 2015/2450 - templates for the submission of information to the supervisory authorities
Status: Final
Date of submission: 11 Nov 2015
Question
Question on the S.14 report column C0100 which is connected with the ECB report E.02.01.b
The S.14 C0100 ‘product classification’ defines the option ‘4’ should be used for products that are ‘pension entitlements’
We would like to ask for more detailed definition as we are unsure if part of our products should be reported as a pension entitlement or as a single life.
The examples of product in question:
• General unit-linked product that matures by design close to retirement age.
• Unit-linked product that accumulates money for retirement using tax advantage
• A ‘with profit’ product that matures by design close to retirement age.
• Annuity
The classification indicates the applicability of the ECB E.02.01.b report, so the precise definition is needed.
EIOPA answer
There is in fact a need to clarify which products should be classified under S.14 as pension entitlements (option 4) and the use of category 5 (other) in cell C0100.
When assessing if a product should be classified as pension entitlement under template S.14 the following should be considered:
- If product is a pension product based on national regulation/law. For this the “Database of pension plans and products in the EEA” published at EIOPA website might be considered (with the caveats referred to in the website);
https://eiopa.europa.eu/publications/database-of-pension-plans-and-prod…-(eea)
- If a product (e.g. a unit-linked product) accumulates money for retirement using a tax advantage related to pensions;
- If the future payments are explicitly linked to the retirement itself;
- If the product complies with all features identified but also includes some very exceptional situations where the money could be surrender like long unemployment or serious illness, it should continue to be considered as a pension entitlement.
The following should not influence the decision:
- If the product substitutes or is additional to the social security system in place;
- If the product is compulsory (usually if substitute) or not compulsory (usually if additional);
- If the payment in future is to be done through annuities or through a lump sum, as long as the payment is at retirement age.
Products with other features other than pension entitlements should be classified as “5 – Other” if both features (e.g. single life and pension entitlements) are material. If one of the features is clearly more material in relation to other then option 5 should not be used. Option 5 is to be used only when both feature are material.