Prometeia Advisor SIM supports Pension Funds in EIOPA occupational pensions stress test

Prometeia Advisor SIM supports ten Italian Pension Funds, covering both Defined Benefit as well as Defined Contribution schemes, in the analysis and processing of the latest EU-wide stress test launched by the European Insurance and Occupational Pensions Authority (EIOPA) in cooperation with the European Systemic Risk Board (ESRB).

The exercise is designed to assess the resilience of the European occupational pensions sector to an adverse market scenario. It will also analyse how Institutions for Occupational Retirement Provisions (IORPs) transfer shocks, resulting from the impact of the adverse market scenario, to the real economy and financial markets. Such stress tests round was launched also in 2015. 

Prometeia cooperates with clients in all the stages of the project, thanks to risk analysis methodologies that are in line with EIOPA’s best practices and the know-how accrued in the 2015 IORP Stress Test. 

More specifically, these tests follow an European-wide common methodology, covering both Defined Benefit and hybrid as well as Defined Contribution schemes, and aim at:

  1. Investigating the resilience of IORPs and insurance undertakings to adverse market developments; 
  2. Assessing second round effects such a shock might have on pension plans; 
  3. Evaluating  the ability of the sponsor – when present – to deal with Defined Benefits. 

From May 18th onwards on EIOPA’s website detailed information on the stress test are available. 

On the following day COVIP, the Italian Supervisory Authority on Pension Funds that coordinates the test domestically, selected the Italian participants to the test.

The test concerns all subjects identified by IORP 2003/41/EC Directive (D. Lgs. 252/05 in Italy) and includes all European Economic Area countries with material IORP sectors, exceeding EUR 500 million in assets, for a total of 19 countries.

EIOPA aims to reach a coverage rate of at least 50% of assets of the total IORP sector per country, and covering at least 50% of Defined Contribution and 50% of Defined Benefits plans.