EIOPA publishes its Methodological Framework for Stress-Testing IORPs

The European Insurance and Occupational Pensions Authority (EIOPA) published today a methodological framework for stress-testing IORPs (Institutions for Occupational Retirement Provision) which presents a set of standard approaches, practical rules and possible methodologies to support the design phase and the management of future IORP stress test exercises.

The rules and guidance provided shall help to make the planning and administration of IORP stress test exercises more efficient, while providing for sufficient room to tailor the analytical tools to the specific objectives of the exercise at hand.

The methodological framework serves as a reference point and toolbox from which appropriate approaches can be developed and custom-fitted, bearing in mind the specificities of the individual exercise in question.

In particular, the methodological framework for stress-testing IORPs sets out:

The stress-testing of financial institutions has evolved considerably over the last few years and has become a core tool for supervisors to identify and assess risks and vulnerabilities in the financial system. EIOPA is mandated to conduct regular EU-wide stress test exercises for the European IORP sector, in collaboration with the European Systemic Risk Board.