PURPOSE: to establish an EU legal framework for
institutions for occupational retirement provision.
LEGISLATIVE ACT: Directive (EU) 2016/2341 of the
European Parliament and of the Council on the activities and
supervision of institutions for occupational retirement provision
(IORPs).
CONTENT: this Directive is a recast of Directive
2003/41/EC of the European Parliament and of the Council on the
activities and supervision of institutions for occupational
retirement provision. It lays down rules for the taking-up and
pursuit of activities carried out by institutions for occupational
retirement provision (IORPs). They are a vital part of the
Union economy, holding assets worth EUR 2.5 trillion on behalf of
around 75 million members and beneficiaries.
This Directive is aimed at minimum
harmonisation and therefore should not preclude Member States
from maintaining or introducing further provisions in order to
protect members and beneficiaries of occupational pension
schemes.
Revising directive 2003/41/EC, the text has four
specific objectives:
1. Clarifying procedures for cross-border
activities: the Directive provides
that Member States shall authorise IORPs registered or authorised
in their territory:
- to engage in cross-border activity. An IORP intending to engage in cross-border activity
should be subject to the prior approval of the relevant
competent authority of its home Member State;
- to transfer pension schemes to other IORPs across borders within the Union in
order to facilitate the organisation of occupational retirement
provision on a Union scale. Transfers should be subject to
authorisation by the competent authority in the home Member
State of the receiving IORP after that competent authority has
received the consent of the competent authority of the home Member
State of the IORP transferring the pension scheme.
Every IORP shall have: (i) sufficient and appropriate
assets at all times to cover the technical provisions in respect of
the total range of pension schemes operated; (ii) an adequate
available solvency margin in respect of its entire business
at all times which is at least equal to the requirements in this
Directive in order to ensure long-term sustainability of
occupational retirement provision.
2. Ensuring good governance and risk
management: the IORPs
shall:
- put in place an effective system of governance which
provides for sound and prudent management of their
activities. The system of governance shall include consideration of
environmental, social and governance factors related to investment
assets in investment decisions;
- ensure that all persons who manage IORPs have the
adequate professional qualifications and requirements for
fit and proper management;
- establish and apply a sound remuneration policy
in line with the long-term interests of members and beneficiaries
of pension schemes operated by the IORP and shall include measures
aimed at avoiding conflicts of interest and shall not encourage
risk-taking which is inconsistent with the risk profiles and rules
of the IORP;
- put in place a risk-management function, an
internal audit function and, where applicable, an actuarial
function;
- in the case of an occupational pension scheme where
members and beneficiaries fully bear the investment risk, the home
Member State may require the IORP to appoint one or more
depositaries for the safe-keeping of assets and oversight
duties.
3. Providing clear and relevant information to members
and beneficiaries: the Directive
places an obligation on IORPs to:
- provide clear and adequate information to prospective
members, members and beneficiaries including: (i) accrued pension entitlements; (ii)
information on the investment profile (iii) the nature of
investment risks; (iv) the options available to members and
beneficiaries in receiving their retirement benefits;
- provide, every twelve months, a pension benefit
statement (PBS) for the individual in
the clearest possible way, also as a basis to feed information into
a potential pension tracking service. The Pension Benefit Statement
should be clear and comprehensive and should contain relevant and
appropriate information to facilitate the understanding of pension
entitlements over time and across schemes and serve labour
mobility. It should provide information on pension benefit
projections based on the retirement age.
4. Ensuring that supervisors have the necessary tools
to effectively supervise IORPs: the
Directive lays down that the competent authorities of the home
Member State shall be responsible for the prudential supervision of
IORPs. Member States shall ensure that their competent authorities
may impose administrative sanctions and other measures
applicable to all infringements of the national provisions
implementing this Directive. Supervision of IORPs shall be
prospective and risk-based. It shall comprise an appropriate
combination of off-site activities and on-site
inspections.
ENTRY INTO FORCE:
12.1.2017.
TRANSPOSITION:
13.1.2019 at the latest.