Occupational pension funds or institutions for occupational retirement provision iorps are financial institutions which manage collective retirement schemes for employers, in order to provide retirement benefits to. One of the latest developments affecting pension schemes operating with the european economic area eea is eu pensions directive iorp ii. The purpose of the 2003 iorp directive was to establish a system of regulation of iorps or occupational pension funds that was common across the european union subsequently adopted by european economic area eea countries of norway, iceland and liechtenstein. Comments on the proposed iorp directive insurance europe. Pensionseurope shares the goal of the socalled iorp ii directive to facilitate the development of. For example voluntary application to schemesinstitutions with dual character or to personal pensions recommendation that high standards of governance and supervision should apply to all types of pension schemes recommendation to examine impacts on the operation of article 4. The european parliament, the council and the commission have agreed on a proposal for a revised iorp ii directive the directive. As with much of the recent financial sector legislation to emerge from the financial crisis of 2008, the directive aims to improve governance and accountability in relation to workplace pensions. The key objectives of the revised iorp ii directive are to.
To simplify legal, regulatory and administrative requirements for settingup crossborder pension funds 2. However, the existing iorp directive covers some occupational pensions. Iorp ii, the european unions sweeping reform of pension fund legislation, came into force on january. Eprs occupational pensions members research service page 3 of 12 existing situation in general, there is only limited eulevel competence in the field of pensions, with matters largely for the member states. February 2012 confirmed the iorp directive would be revised. Eu directive on institutions for occupational retirement. The revised directive, based on a proposal adopted by the commission in 2014, strengthens and replaces the existing 2003 iorp directive. This was the culmination of six months of negotiations and was agreed in june 2016. Aug 31, 2012 our story starts with the 2003 iorp directive, although that was itself many years in the making. Directive eu 20162341, on the activities and supervision of institutions for occupational retirement provision iorp ii came into force on 12 january 2017 and must be implemented into irish law by january 2019.
Directive eu 20162341 of the european parliament eurlex. The 2004 pensions convention institute and faculty of. To improve and modernise regulation for iorps that operate dc plans. Simply put, an iorp will remain subject to the prudential supervision of the relevant authorities of its home member state that is, where the iorp was established, but will also become subject to supervision by the relevant authorities in the host member state or states where it. It transforms the directive with extensive new requirements on governance and communications.
Under the current iorp directive a scheme is treated as a crossborder scheme where the relationship between the sponsoring undertaking and members is governed by the social and labour law of a member state other than the home member state. The extent if at all to which the uk will need to comply with iorp ii is unlikely to be known until the terms of brexit become much clearer. Lessons from the european financial stability framework exercise. The initial directive contained basic requirements for iorps which could be completed at national level, thus giving flexibility in order to properly cope with the important diversitiy of pension funds in the european union.
Changes to the eus 2003 pensions directive, iorp ii, aims to bring their existing requirements in line with the insurance industries solvency ii directive which is designed to strengthen the internal market by encouraging the development of crossborder pension schemes. The upcoming trialogue discussions on the revised directive on institutions for occupational retirement provision iorp ii between the european institutions provide an important opportunity to ensure appropriate safeguards for iorps members and beneficiaries, according to insurance europe, the european insurance and reinsurance federation. Institutions for occupational retirement provision iorp directive 200341ec law details information about directive 200341ec including date of entry into force and links to summary and consolidated version. Pdf impact of institutional investors on financial. Pdf impact of institutional investors on financial market. Jun 17, 2011 an iorp operating crossborder is subject to the notification procedure set out in the directive. In view of demographic change, sustainability and adequacy, the overall goal should be promotion of occupational pensions. The requirements in this edition of directive 010 are effective on december 22, 2009. Belgium, prime location for paneuropean pension funds belgium.
Under the committees new definitions a scheme would be treated as a crossborder scheme where it is. Iorp ii trialogues offer opportunity to safeguard members. Finalised legislative changes to the iorp ii may still apply to the uk before the country makes its departure from the eu. Introduction a new european pensions directive the directive came into force in january 2017. How the eu directive has reshaped the pensions industry.
Background to the report the directive acknowledges in its recitals that a genuine internal market for financial services is crucial for economic growth and job creation in the community and that this directive represents a first step on the way to an. A new european pensions directive the directive came into force on 1 january 2017 formally directive eu 20162341 of the european parliament and of the council of 14 december 2016 on the activities and supervision of institutions for occupational retirement provision iorps, published in the eu official journal of 23 december 2015. Directive 200341ec of the european parliament and of the council of 3 june 2003 on the activities and supervision of institutions for occupational retirement provision the european parliament and the council of the european union, having regard to the treaty establishing the european community, and in particular article 472, article 55 and. It added 43 new articles to the original iorp directive and put a renewed focus on governance and communication standards. In some member states, selfemployed persons cannot join an iorp unless cer tain requirements, including those imposed by social and labour law, are met. Looking at the already existing reporting requirements for iorps on the na. Institutions for occupational retirement provision. Making the changes required to comply with this legislation is going to be a lot of work for those involved in running pension schemes.
The new eu directive on the activities and supervision of institutions for occupational retirement provision iorp ii was adopted in 2016. Draft report econ committee the econ committees rapporteur on the iorp ii directive, brian hayes, has published his longawaited draft report on the legislation. The new iorp directive, which emerged from the eus trilogue negotiations on 30 june 2016, will introduce new governance and disclosure requirements for occupational pension plans within the eu. A new version of the european union directive on institutions for. It does not include any harmonised solvency rules for occupational pension funds. Francoise audag dechamps, federal public service chancery of the prime minister. It will also relax the funding requirements for cross.
Lcp guide to the new european pensions directive the iorp ii. The european parliaments economic and monetary affairs econ committee has published its draft report on the revised iorp directive which was proposed by the previous european commission back in march 2014. Iorp ii trialogues offer opportunity to safeguard members and. In our view, the detail of what is addressed in this assessment should be left to the iorp, subject to high level requirements set out in the directive and developed by national competent authorities. The directive should focus on the activities and the risks borne by the iorp, not on the underlying schemes. This will now be the basis for discussion and amendments in the european parliament throughout the autumn. The directive harmonises basic prudential rules governing the operation of iorps.
The recitals of the directive clarify the position on this where the sponsoring undertaking and the iorp are located in the same member state, the mere fact that members or beneficiaries of a. Following todays approval by the council, the text will have to be formally approved by the european parliament. You can find out more about cookies in our cookie policy. Occupational retirement provision iorp is set to have a profound. Iorp ii and solvency ii should be extended until the quantitative requirements applicable to iorps have been revised. Directive eu 20162341 of the european parliament and of the council of 14 december 2016 on the activities and super vision of institutions for occupational retirement provision iorps. For example voluntary application to schemesinstitutions with dual character or to personal pensions recommendation that high standards of governance and supervision should apply to all types of pension schemes recommendation to. European commission press release details page european commission memo brussels, 27 march 2014 see also ip14320 1. Institutions for occupational retirement provision directive. Since the iorp ii directive is the exclusive basis for.
A liability assessment is an assessment conducted by a licensee or approval holder to estimate the cost to suspend, abandon, or reclaim a site. The initial directive contained basic requirements for iorps which could be completed at national level. As of june th, 2016, the new directive 201453 eu red, will enter into force. Written by david eatock 4th edition, in 2014, the european commission proposed a revision iorp ii of the existing institutions for occupational retirement provision iorp directive of 2003, which covers certain occupational pension savings. Iorps directive the iorps directive, which was published on 23rd september 2003 is required to be implemented by the member states by 23rd september 2005. The eu commission has now proposed that the 2003 iorp directive be revised to address these issues.
It remains the only applicable directive until this date. It lays down minimum standards on funding pension schemes, the types of investments pensions may make and permits crossborder management of pension plans. Much of this has been on the back of doomsday modelling of the costs of defined benefit liabilities if solvency ii directive capital requirements were. This directive is to be implemented in accordance with those rights and principles. Directive as last amended by directive 200064ec of the european parliament and of the council oj l 290, 17.
Iorp 2 directive developments in the european parliament. The 2004 pensions convention 78 june 2004, sheraton skyline hotel, heathrow the eu directive and other key european trends sally dixon, pricewaterhousecoopers outline of presentation. Commission welcomes deal to improve rules for occupational. By continuing to use this site you are giving us your consent to do this. Position paper on proposed revision of iorp directive.
Proposed revision of iorp directive actuarial association of europe i 11 introduction iorp i the current iorp directive passed in 2003 as a first step towards creating an internal market for occupational retirement provision. Since the objective of this directive, namely to create a union legal framework covering iorps, cannot be sufficiently achieved by the member states, but can rather, by reason of the scale or effects of the action, be better achieved at union level, the union may adopt measures, in accordance with the principle of subsidiarity as set out in. Institutions for occupational retirement provision iorp. Position paper on iorp ii directive proposal draft report econ committee introduction the european regulatory regime for iorps is based on the directive 200341ec. An iorp shall notify its intention to carry out crossborder activity to the competent authority of the home member state. Institutions for occupational retirement provision directive 200341ec is a european union directive designed to create an internal market for occupational retirement provision. Member states now have until 12 january 2019 to implement it.
The amendments to the existing legislation focus on governance and disclosure. Directive as last amended by directive 200274ec of the european parliament and of the council oj l 270, 8. Take our short questionnaire to see how prepared you are for iorp ii here. The xbrl portal illustrates the taxonomy directly in an excelstyle editor, like. Institutions for occupational retirement provision iorp directive 200341ec law details information about directive 200341ec including date of entry into force and links to. All members and beneficiaries should enjoy a high level of protection. However, the proposals to revise the iorp directive need to better balance measures that would make a real difference in crossborder provision and those aiming to ensure safety and security. Iorp ii extends the existing iorp directive from 12 pages to over 100 pages, changing and introducing new requirements over a whole range of areas. Iorp ii update text of revised iorp ii directive agreed and awaiting formal approval from european parliament the european parliament, the council and the commission have agreed on a proposal for a revised iorp ii directive the directive. Revision to occupational pensions directive iorp ii.
Institutional investors are seen as key investors on the financial market, crucial market makers, supporting market liquidity and activity, as well as important pillars of pension systems and for. There are some 60,000 active defined contribution pension schemes with 240,000 scheme members. Institutions for occupational retirement provision directive 20162341 is a european union directive designed to create an internal market for occupational retirement provision. To achieve these objectives, the ec proposed to rely on a combination of improved qualitative and enhanced. The proposed amendments to the iorp directive extend the scope and will significantly impact defined contribution schemes. Impact of institutional investors on financial market stability. Directive eu 20162341 of the european parliament and of the. Institutions for occupational retirement provision iorp societe. Pursuant to sections 1ai, 1b, and 8 of executive order 662 of march 20, 2014, blocking property of additional persons contributing to the situation in ukraine the order and 31. Whether or not the new iorp directive will be implemented in the uk is clearly uncertain following the outcome of the recent eu referendum and will depend upon the timing and terms of the uks exit. The original pensions directive known as iorp i introduced a number of new rules for iorps broadly, occupational pension schemes.
All casing ordered or manufactured after september 22. Eu pensions directive iorp ii legislative and regulatory updates present both risks and opportunities for pension scheme management, on both a local and multinational basis. To introduce riskbased supervision for iorps, focus on three main pillars 3. All casing ordered prior to the issuance of this directive may be used if it conforms to the design factor requirements in section 1. A pension scheme in the context of the iorp directive is an agreement laying down the pension promise to. Iorp ii focuses on the governance of pension schemes and on their communications with individual members. The directive is the result of almost three years of discussion and negotiation. Proposal for a directive of the european parliament and of the council on the activities and supervision of institutions for occupational retirement provision recast delegations will find attached the text of the abovementioned directive, as provisionally agreed with the european parliament. Jun 30, 2016 the revised directive, based on a proposal adopted by the commission in 2014, strengthens and replaces the existing 2003 iorp directive.
Jan 24, 2017 written by david eatock 4th edition, in 2014, the european commission proposed a revision iorp ii of the existing institutions for occupational retirement provision iorp directive of 2003, which covers certain occupational pension savings. As with the iorp i directive, member states can choose to exempt schemes with less than 100 members from much of its scope, but iorp ii further provides that schemes with more than 15 members must be subject to much of the general governance and prudent person investment requirements. On 27 march 2014, the european commission adopted the draft for a renewal of directive 200341ec, called iorp ii. The iorp ii taxonomy can be used from day one with no need for manual. To register and to be run by persons of good repute. Schemes may still need to prepare for the revised iorp ii. An iorp operating crossborder is subject to the notification procedure set out in the directive. Only need report to one states supervisor euwide start up procedure. The iorp ii directive sets common standards ensuring the soundness of occupational pensions and better protects pension scheme members and beneficiaries, by means of among others. The aae notes that the original iorp directive was intended to facilitate the establishment of cross border or pan european iorps, and has not achieved this objective to date, although a few major. An iorp proposing to carry out crossborder activity and to accept sponsorship from a sponsoring undertaking shall be subject to prior authorisation by the relevant competent authority of its home member state. These rules minimum standards are designed to ensure that occupational pension scheme transactions. Xbrlbased reporting a major challenge for pension funds iorp ii. This would pose excessive administrative burdens and costs for pension funds, in particular smaller ones.
This is important since socialsecurity systems are coming under increasing pressure, which means that citizens are likely to increasingly rely on occupational retirement pensions to complement other retirement provisions. In addition, some of the measures go too far in harmonizing aspects of occupational. Directive 4 as amended on october 31, 20171 under executive order 662 pursuant to sections 1ai, 1b, and 8 of executive order 662 of march 20, 2014 blocking property of additional persons contributing to the situation in ukraine the order and 31 c. The scope of the directive and its essential health and safety requirements. Wed like to use cookies which help us understand how our website is used by our visitors. Dec 21, 2016 eu directive on institutions for occupational retirement provision iorp ii. Position paper on proposed revision of iorp directive actuarial association of europe.