EU regulator EIOPA to require retirement plans to be more transparent about derivatives

The European Union’s retirement fund regulator will require occupational retirement plans to report their derivative positions in efforts to identify risks and better protect investors starting on Jan. 1, 2025.

The European Insurance and Occupational Pensions Authority said Friday that retirement plans, known in the EU as institutions for occupational retirement provision, or IORPs, will have to report their derivative exposure, including through investment funds, to European national supervisors.

Derivative information will help regulators assess actual hedging of various types of risks, EIOPA said.

The new data requirements on the quarterly reporting of derivatives and cash flows will be mandatory for IORPs with more than €1 billion ($1.1 billion) of assets under management.

Defined contribution and defined benefit funds will also have to better report the contents of investments funds, including underlying assets of Undertakings for the Collective Investment in Transferable Securities funds, known as UCITS funds, which can be registered in Europe and sold to investors worldwide.

EIOPA said it decided to close “important data gaps on emerging risks” and wants to see better cross-border data and have national regulators accurately monitor operations of cross-border plans.