The common risk-management framework recommended by the European Insurance and Occupational Pensions Authority (EIOPA) would be unnecessary and costly for occupational pension funds, according to PensionEurope, the European pensions association. It welcomed the authority’s decision not to pursue solvency requirements for Institutions for Occupational Retirement Provision (IORPs) but said it had “strong concerns” about EIOPA’s proposal for IORPs to be required to carry out a standardised risk assessment to calculate the impact of stresses on a common framework balance sheet.Janwillem Bouma, chair of PensionsEurope, said: “Risk management is essential for IORPs, and they regularly carry out their own stress tests and scenario analyses, such as asset and liability-management studies, as part of their own risk-management processes. “EIOPA proposes an additional framework, which we find unnecessary and costly.” PensionsEurope’s response is in line with other reactions to EIOPA’s proposal, which have been critical of the risk-assessment framework while approving the authority’s stance on solvency rules. Matti Leppälä, chief executive at PensionsEurope, said EIOPA’s decision not to pursue a harmonised solvency framework for IORPs was positive.He reiterated his organisation’s opposition to additional capital requirements, which it sees as detrimental for pension provision. “We also welcome that EIOPA has taken into consideration the diversity of IORP landscape across Europe,” he said. “Requirements have to be proportional, and small and medium-sized IORPs should not be overly burdened with any new risk-management requirements.”PensionsEurope will provide a more in-depth response in a few weeks’ time on further analysis of EIOPA’s proposal.