In 2003, the EU issued a Directive on ‘the activities and supervision of institutions for occupational retirement provision’ which became known as the IORP Directive. This was reviewed and substantially amended in 2016 in the IORP II Directive, which was required to be transposed into national law by January 2019, although a number of Member States missed this deadline. IORP II included a requirement to review certain aspects after 5 years and the European Commission (EC) issued a Call for Advice to EIOPA in 2022. EIOPA undertook a consultation, to which AAE and other stakeholders made submissions, and issued its advice to the EC on 28 September 2023, when it also published feedback on the consultation exercise. It is expected that the new EC will issue a Proposal for a Directive in the coming months.
In its Call for Advice, the EC highlighted the increasing trend of a shift from Defined Benefit (DB) to Defined Contribution (DC) IORPs, and the consequent transfer of part or all of the risk from the IORP to the members, and asked if the regulatory system needed to be adapted to recognise this shift. Other issues noted in the call for advice related to cross border activity and transfers, whether the Pension Benefit Statement meets its objectives, the interaction of sustainability and fiduciary duties and the desirability of diversity in the management boards of IORPs. In its advice, EIOPA made proposals for change to the Directive in some of these areas, as well as some other issues which it considered worthy of review.
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