On 27 March the European Commission adopted a legislative proposal for new rules on occupational pension funds (IORPs), revising the existing European Directive on occupational pension funds which dates back to 2003. This revision aims at strengthening the Internal Market by encouraging the development of cross-border pension schemes, and transforms the existing Directive with extensive new governance requirements on risk management, outsourcing and internal audit. However, as announced earlier in 2013 by the Internal Market Commissioner, Michel Branier, the new proposal does not cover the issue of solvency rules for pension funds, which for the time being will remain an open issue. The Commission intends to re-examine this question on the basis of more complete data.
This revision builds on a number of initiatives launched in recent years such as the White Paper on pensions and the Green Paper on long-term financing of the European economy. Member States will be required to bring the new Directive into force by 31 December 2016. For more details regarding this legislative proposal, please see
For AGE, the lack of strict solvency rules applying to IORPs raises concerns about the effectiveness in protection of the rights of current and future beneficiaries of all various IORPs across EU. AGE members have been repeatedly calling on the Commission to introduce solvency rules in order to limit high risk investments and improve performance and return on investments. This would also help rebuild confidence in pension funds after the recent financial crisis and attract new entrants. A fair competition between all operators providing the so-called 3rd pillar-pension products can only develop if there are common and transparent regulations that all actors must comply with. AGE members will discuss in details the Commission’s new legislative proposal and will prepare a common response in upcoming months.