The iorp ii directive provides an updated eu legislative framework for workplace pensions. 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. The iorp directive was originally issued in june 2003 and was designed to. Institutions for occupational retirement provision directive 20162341 is a european union directive designed to create an internal market for occupational retirement provision. Directorategeneral for financial stability, financial services and capital markets union 6 article 63 of directive eu 20162341 does not specify a specific place of establishment for the sponsoring undertaking. Institutions for occupational retirement provision directive. If you do not see its contents the file may be temporarily unavailable at the journal website or you do not have a pdf plugin installed and enabled in your browser. In 2003, the european commission created the international occupational pension funds directive also referred to as the iorp directive to establish the fundamental requirements of offering occupational pension funds and its regulations. Sep 12, 2018 as iorp ii is a directive, it does not have direct effect on schemes but must be implemented into national law by each member state. Directives 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 recast text with eea relevance the european parliament and the council of the european union. The iorp ii directive will improve the way iorps are governed, make it easier for iorps to conduct crossborder business and provide clearer information to pension scheme members and beneficiaries. 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 harmonises basic prudential rules governing the operation of iorps. It lays down minimum standards on funding pension schemes, the types of investments pensions may make and permits crossborder management of pension plans. By contrast, what constitutes an iorps home member state is defined in the directive as the member state in which the institution has its registered office and its main administration or, if it does not have a registered office, its main administration. 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. Jun 17, 2011 an iorp operating crossborder is subject to the notification procedure set out in the directive. The revision of the iorp directive, including the qis, is a deeply political discussion where the voice of social partners, pension funds, and the wider pension industry should be heard. The european commission was keen to copy and paste solvency ii for insurance. 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. The eu commission has now proposed that the 2003 iorp directive be revised to address these issues. This agreement enables negotiations with the european parliament. As iorp ii is a directive, it does not have direct effect on schemes but must be implemented into national law by each member state. Position paper on proposed revision of iorp directive.
The uk will still be a member of the eu at this time, and as such has committed to transpose the directive. The discussions around iorp ii began in 2011, when the ec issued a call for advice1 on potential changes to the 2003 pensions directive. But it might appear that the directive now holds no interest to the u. The process of revising the iorp directive must be driven by realistic timelines, and truly aim at improving the adequacy and sustainability of occupational. In 2003, the iorp directive was adopted, establishing the european prudential framework for occupational pension funds, and setting principles designed to secure the retirement income of europes citizens provided by iorps. At an early stage, the proposed directive was referred to as solvency ii for pensions, reflecting its similarity to the insurance directive of the same name. The pensions authority has published information to give trustees an understanding of the breadth of their responsibilities arising from the provisions of the iorp ii. Revision of the iorp directive on 10 december 2014, the permanent representatives committee agreed, on behalf of the council, its negotiating stance on a draft iorp ii directive. The purpose of the 2003 iorp directive was to establish a system of regulation of iorps or. Two wellknown reference clients in germany with a pension fund of eur 1 billion total assets have. Aug 31, 2012 our story starts with the 2003 iorp directive, although that was itself many years in the making. European parliaments proposals positive but work still to be done. Employers, including smes, are expected to benefit through the reduced cost of joining an existing iorp. Our story starts with the 2003 iorp directive, although that was itself many years in the making.
The european insurance and occupational pensions authority eiopa was consulted for advice. Directive as last amended by directive 200274ec of the european parliament and of the council oj l 270, 8. Lcp guide to the new european pensions directive the iorp ii. Institutions for occupational retirement provision iorp. Directorategeneral for financial stability, financial services and capital markets union 6 article 63 of directive eu 20162341 does not specify a specific place of establishment for the sponsoring. The authority will provide technical support to the department of employment affairs and social protection in transposing the directive into law by the eu deadline. It transforms the directive with extensive new requirements on governance and communications. The latest directive also referred to as iorp ii was nearly three years in the making, with the eu commissions initial proposal for a new directive having been published in march 2014. Iorp ii is a recast of the directive 200341ec2, commonly known as. We discussed the directives requirements, its processes, international factors and future implications. To simplify legal, regulatory and administrative requirements for settingup crossborder pension funds 2.
The directive should focus on the activities and the risks borne by the iorp, not on the. 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. February 2012 confirmed the iorp directive would be revised. 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. A pension scheme in the context of the iorp directive is an agreement laying down the pension promise to. An iorp shall notify its intention to carry out crossborder activity to the competent authority of the home member state. The new eu directive on the activities and supervision of institutions for occupational retirement provision iorp ii was adopted in 2016. In particular, iorp i stated that pension funds should. Under the current iorp directive a scheme is treated as a crossborder scheme where. However, the iorp was since been revised in 2016 in response to financial crisis since 2008. This article will mainly deal with recent developments during and after the implementation of the iorp directive. The eu has recently approved a major revision of the eu legislation on workplace pension schemes the directive on institutions for occupational retirement provision. 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. The directive should focus on the activities and the risks borne by the iorp, not on the underlying schemes.
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. To introduce riskbased supervision for iorps, focus on three main pillars 3. With the iorp ii directive coming to force starting january 2019. The authority will provide technical support to the department of employment affairs and social protection in transposing the directive into law by the eu deadline of january 2019. In the internal market, institutions for occupational retirement provision iorps should have the possibility to operate in other member states while ensuring a high level of protection and security for members and beneficiaries of occupational pension schemes. The directive contributes to iorps role in improving financial stability, as certain iorps are large financial institutions with several millions of members and beneficiaries. The iorp directive the directive was published in the official journal on 23 september 2003, with implementation required on 23 september 2005 at the latest. Directive eu 20162341 of the european parliament and of the. Financial stability, financial services and capital markets union. With the iorp ii directive coming to force starting january 2019, pension firms in europe will have to revamp the it systems and processes that support risk management and governance functions. 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.
The iorp directive took far too long to become european law. 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. Over two years after initially being proposed, the new iorps directive 20162341ec iorps ii was adopted by the european parliament on 14 december 2016. The authority will provide technical support to the department. Pensionseurope issued a short press release welcoming this agreement. Comments on the proposed iorp directive insurance europe. Directive 200341ec on the activities and supervision of institutions. Revision of the occupational pension funds directive. Iorp ii focuses on the governance of pension schemes and on their communications with individual members. The iorp directive revision a truly political debate.
The iorp ii directive and pensions lexispsl, practical. March 2011, call for advice from the european insurance and occupational pensions authority eiopa sought advice on how to improve. The iorp directive was originally issued in june 2003 and was designed. The directive is the result of almost three years of discussion and negotiation. On january 2019 the eu directive 20162341 commonly known as iorp 1 ii comes into effect. This directive is to be implemented in accordance with those rights and principles. 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. Iorp ii, as it is known, was finalised in january 2017. On 27 march 2014 the eu commission published its proposal for a recast version of the iorp directive 200341ec. With the implementation period running slightly ahead of, but largely in parallel to, the uks brexit negotiations, it is not yet clear how if at. 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. By contrast, what constitutes an iorps home member state is defined in the directive as the member state in which the institution has its registered office and its main administration or, if it does not have. Institutions for occupational retirement provision. 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.
This practice note looks at the directive on the activities and supervision of institutions for retirement provision iorps, also known as the iorp ii directive, which was implemented into uk law on january 2019 building on the original iorp directive adopted in june 2003, which set out a pan. Iorp ii and solvency ii should be extended until the quantitative requirements applicable to iorps have been revised. Simply put, an iorp will remain subject to the prudential supervision of the relevant. Revision to occupational pensions directive iorp ii. Occupational retirement provisions directive iorp 2. An iorp operating crossborder is subject to the notification procedure set out in the directive. You can find the iorp ii considerations for trustees document under related files below and it has also been published to the iorp ii directive page of the website, see here. One of the latest developments affecting pension schemes operating with the european economic area eea is eu pensions directive iorp ii. 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. 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. To improve and modernise regulation for iorps that operate dc plans. Member states now have until 12 january 2019 to implement it.
The amendments to the existing legislation focus on governance and disclosure. Over two years after initially being proposed, the new iorps directive 20162341ec iorps ii was adopted by the european parliament on 14 december 2016 and came. The extent to which iorp ii will apply to the uk will depend how and when brexit occurs. This practice note looks at the directive on the activities and supervision of institutions for retirement provision iorps. The directive was transposed into the national legislation of the member states in 20052006. 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. These rules minimum standards are designed to ensure that occupational pension scheme transactions. The pensions authority iorp ii considerations for trustees. Recent developments after the implementation of the iorp directive article pdf available in pensions an international journal 144 november 2009 with.
An occupational pension fund, also referred to as an employer funded or employer administered scheme, is a pension offered by an employer to an employees retirement scheme. The key objectives of the revised iorp ii directive are to. Occupational retirement provisions directive iorp 2 transposition status. Iorp ii directive eiopas iorp stress tests and cbshbs pensionseurope shares the goal of the socalled iorp ii directive to facilitate the development of occupational retirement savings and to provide sustainable and adequate occupational pensions to the european citizens.
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