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Institutions for Occupational Retirement Provision (IORPs)

Occupational pension funds or "IORPs" are a form of employment-related retirement provision, alongside state social security pension schemes and voluntary pension schemes. They benefit from the principles of free movement of capital and free provision of services in the EU. This means, for example, that:

  • pension funds can manage occupational pension schemes for companies established in another EU Member State
  • pan-European companies can have a single pension fund for all their subsidiaries throughout the EU.

The rules governing the activities of IORPS in all EU countries are set out in Directive 2003/41/EC (the "IORP" Directive).

On 30 June 2016, the European Parliament, the Council and the European Commission agreed on the text of a revision of the IORP Directive, known as IORP2, based on a Commission proposal of 27 March 2014. The new Directive improves pension funds' governance, increases transparency of information to pension scheme members and beneficiaries, improves supervision of pension funds and lays down new rules for cross-border activities and transfers. Overall, the new rules will encourage IORPs to play their role as key long-term institutional investors in the context of the Commission's Capital Markets Union initiative.

The new Directive is expected to be adopted formally by the European Parliament and the Council before the end of 2016. No official text is available yet. After formal adoption, the Directive will be published in the Official Journal of the European Union and will enter into force 20 days following publication. Member States will then have 24 months to transpose the new rules into their national law.

Links

2003 IORP Directive

  • Directive 2003/41/EC of the European Parliament and of the Council of 3 June 2003 on the activities and supervision of institutions for occupational retirement provision (IORPs)
  • Implementing Regulation 643/2014 laying down implementing technical standards with regard to the reporting of national provisions of prudential nature relevant to the field of occupational pension schemes according to Directive 2003/41/EC

Revision of the IORP Directive

Archive

Consultations

Reports

IORP Directive: Commission report on some key aspects

The IORP Directive explicitly sets out reporting requirements for the Commission on four key aspects. Article 15(6) requires a regular report on the rules regarding the calculation of technical provisions. Article 21(4) requires a one-off report on the application of investment rules, progress achieved in the adaptation of national supervisory systems and cross-border custodianship. A Report from the Commission on these key aspects was adopted on 30 April 2009 with a view to fulfilling this reporting obligation.