The European Union pension supervisor has said it would welcome “a pragmatic result” to the review of the bloc’s pension fund legislation, earmarked for later this year.
Petra Hielkema, chair of the European Insurance and Occupational Pensions Authority (EIOPA), made the comment in a reaction to the European Commission’s Savings and Investments Union (SIU) strategy release last week.
Emphasising funded pensions and member states’ shared responsibility for change, the strategy aims to promote economic growth in the EU by directing more retail savers to the capital markets and harnessing more of institutional investors’ firepower.
At EIOPA, Hielkema said the Commission rightly identified the need to channel retail savings from bank accounts to investment products to fuel growth of the European economy, and that the agenda needed to be advanced swiftly.
The Commission’s SIU strategy includes proposals to launch reviews of the IORP II Directive and the Pan-European Personal Pension (PEPP) framework, which Hielkema said represented “a valuable opportunity to contribute to achieving the SIU’s objectives”.
“EIOPA would welcome a pragmatic result, keeping it simple, ensuring it can be implemented and can be done soon,” she wrote.
The review of IORP II was left out of the European Commission’s work plan for 2025, but a legislative proposal is now scheduled to be released by Q4 2025, the same timeline envisaged for the review of the PEPP framework.
PensionsEurope said the Commission’s plan to launch all pension-related initiatives in Q4 2025 “will require careful planning and adequate resources from both the European institutions, as well as various stakeholders”.
“The specificities of the IORP II Directive focusing on occupational pension institutions and the PEPP regulation on a European personal pension product are fundamentally different legal frameworks,” it said.
“If both reviews were to be launched simultaneously by the European Commission, they must be kept separate policy issues.”
The Dutch pension federation, which said it was pleased with the SIU plans presented by the Commission, will keep an eye on the length of the implementation phase for new requirements included in the IORP II proposal when it is released.
It does not want any new European obligations in the Netherlands to have to be implemented until after the implementation of the transition to a defined contribution system in the Netherlands.
“It is important to avoid simultaneous, complex Dutch European processes,” said Pensioenfederatie.
EIOPA presented its final advice on changes to the IORP II Directive in September 2023, covering proportionality, conflicts of interest, cross-border activities and transfers, sustainability and diversity and inclusion.
What the Commission will propose remains to be seen, but in its SIU strategy document, it said it wanted to “clarify” that pension funds investing in alternative assets like venture capital “can be in line with the prudent person legislation enshrined in current legislation”.
Depending on the nature of this ‘clarification’, this could be controversial, with PensionsEurope noting that, as legislated in the IORP Directive, this principle already enabled pension funds to invest in private equity and venture capital.
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