Toward a European Pension Directive: On Holism, the Actuarial Interest Rate, and Pension

In this article, we discuss what the work of the European Commission and the European Insurance and Occupational Pensions Authority (EIOPA) means with regard to developing a European Union (EU) prudential standard and how we should move toward a more objective valuation of pension liabilities in the EU. There are many different kinds of pension liabilities in the European member states, and there are at least just as many different ways of financing them. Pension liabilities must therefore be analyzed in order to take the right approach to valuation, and this should be done at the EU level. We will describe the valuation of pension liabilities and draw some conclusions.