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Question

I believe the formula C50=MAX(0,(MIN(B50*0.25, C46))) is incorrect. According to L2 Article 72 EOF1, it should be C50=MAX(0,(MIN((B46+C46)*0.20, C46). Ie restricted Tier 1 "shall make up less than 20 % of the total amount of Tier 1 items".There was a query sent to EIOPA questioning the 25% instead of the 20% as per L2; it was published in "EIOPA_13_415_Final_Report_on_CP10" as question 1004. The answer was: "Disagree. The formula references unrestricted Tier 1, where the limit is equivalent to 25%. As opposed to total Tier 1, where the limit is 20%.". Trying to understand the thinking behind the "equivalent" word, I believe EIOPA may have followed the following logic:C50

European Insurance and Occupational Pensions Authority · Accepted Answer

The formula in in fact correct.C50=MAX(0,(MIN(B50*0.25, C46)))
The objective is to define the amount of eligible restricted Tier 1 to cover the SCR.
The relevant cells are:C50 - Total eligible own funds to meet the SCR – tier 1 restricted itemsB50 - Total eligible own funds to meet the SCR – tier 1 unrestricted  itemsC46 - Total available own funds to meet the SCR – tier 1 restricted items
Article 72 of the draft delegated acts defines how certain Tier 1 items are restricted in relation to the total amount of eligible Tier 1 own funds, (up to a maximum of 20%).  
The formula for C50 is derived from B50 and not from total amount of eligible Tier 1 items, which is why it is not 20%. 
So to define the amount of restricted eligible Tier 1 items we need to assess the relationship between the restricted and unrestricted Tier 1 items. This lead us to the formula C50

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