Managing collective retirement schemes — occupational pension funds

 

SUMMARY OF:

Directive (EU) 2016/2341 — activities and supervision of institutions for occupational retirement provision

WHAT IS THE AIM OF THIS DIRECTIVE?

It sets out minimum harmonisation rules for institutions managing collective retirement schemes for employers on behalf of their employees. EU governments may introduce further measures they consider necessary.

The rules aim to:

The legislation revises and replaces Directive 2003/41/EC, which needed to be updated after the 2008 financial crisis.

KEY POINTS

EU countries must ensure that occupational pension funds or institutions for occupational retirement provision (IORPs):

The relevant national authorities in the EU countries:

IORPs must provide prospective and actual members and beneficiaries with clear, updated and free information. This includes:

Depending on the requirements in question, EU countries may exempt certain funds which operate pension schemes with fewer than 15 or 100 members from certain conditions of the legislation. In the event that a pension fund wishes to provide its services in other EU countries, however, it has to apply all the rules laid down in the directive.

The European Insurance and Occupational Pensions Authority:

The European Commission must report to the European Parliament and to the Council on the implementation of the legislation by 13 January 2023.

FROM WHEN DOES THE DIRECTIVE APPLY?

The directive entered into force on 12 January 2017. It has to become law in the EU countries by 13 January 2019 and it will apply from the date of national transposition.

BACKGROUND

Occupational pensions include contributions from employers. They are the ‘second pillar’ of the pension system. State-based social security pensions are the ‘first pillar’. The ‘third pillar’ consists of individuals’ non-compulsory private pension savings.

Under EU rules, funds in one country can manage occupational pension schemes for companies based in another. Pan-EU companies can also have a single pension fund for all their European subsidiaries.

Some 125,000 occupational funds operate across the EU. They hold assets worth €2.5 trillion on behalf of around 75 million citizens, representing 20% of the EU’s working-age population.

For more information, see:

KEY TERMS

Actuarial functions: defined in Article 48 of Directive 2009/138/EC (Solvency II), it covers (i) the coordination and monitoring of technical rules, including methodology, assumptions and data; (ii) reporting; and (iii) supporting the risk-management function.

MAIN DOCUMENT

Directive (EU) 2016/2341 of the European Parliament and of the Council of 14 December 2016 on the activities and supervision of institutions for occupational retirement provision (IORPs) (recast) (OJ L 354, 23.12.2016, pp. 37-85)

RELATED DOCUMENTS

Regulation (EU) No 1094/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Insurance and Occupational Pensions Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/79/EC (OJ L 331, 15.12.2010, pp. 48-83)

Successive amendments to Regulation (EU) No 1094/2010 have been incorporated into the original document. This consolidated version is of documentary value only.

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 (OJ L 235, 23.9.2003, pp. 10-21)

See consolidated version.

last update 30.01.2018