When entering into long-term commitments one should consider a risk management that ensures the ability to fulfill these obligations. In this context obligations of occupational pensions, which are assumed by employers, life insurers or special institutions for occupational retirement provisions (IORPs), have become a subject of specific interest. The European Commission has already developed a supervisory system for life insurers, called Solvency II. Through the IORP II project initial steps have been taken to revise the current IORP Directive.

We will discuss the question of how such a system should be designed for IORPs. At first we will work out the differences between German pension funds and life insurers. The decision, which of these characteristics should be taken into account for the calculation of the Solvency Capital Requirement (SCR), will primarily depend on the objectives set. Possible objectives are the protection of the beneficiary, the employer as the contractual partner of the pension fund, the stability of the system or the avoidance of regulatory arbitrage.

Based on these objectives we can derive two possible regulatory perspectives: The first perspective is aimed at the protection of the beneficiary within a system, which is assumed to be stable. The second perspective is targeted toward the following three points: the protection of the contractual partner, the stability of the system and the avoidance of regulatory arbitrage. We will discuss the consequences of these two perspectives with respect to the consideration of the above mentioned specifics for the calculation of the SCR and also further effects and risks.

Finally, we will introduce a model which allows the calculation of the SCR for each of the two different perspectives. Using this model, we will analyze the perspectives regarding their impact on the SCR under varying assumptions and different constellations of risk sharing.