EUROPE – The European Association of Paritarian Institutions (AEIP) has accused the European Commission of ignoring the social aspects of the revised IORP Directive and "mistakenly" concluding the directive relates only to internal market policies.

AEIP director Francesco Briganti told IPE that the European Commission, in revising the IORP Directive based on new solvency rules, failed to make any distinction between the prudential aspects of IORPs and social law, which is applied to the pension schemes managed by IORPs.

"In trying to apply solvency rules for occupational pensions, the European Union is not just addressing to the sole IORP – as the name of the directive indicates – but the scheme itself," he said. "This, in turn, implies that the directive will have larger scope than it is supposed to."

Briganti went on to say that, in many EU member states, occupational pension schemes are complex structures involving several actors, with the IORP being just one.

According to him, all those actors are often also involved in actions aimed at keeping the solvency requirements of the scheme.  

"More precisely," he added, "in addition to IORPs, the employers and the trade unions have a voice in adjusting the solvency of their schemes, and, in some cases, even the pensioners share the burden of the adjustment mechanisms aimed at improving the safety of pension schemes."

However, such decisions taken by the social partners fall within the sphere of labour arrangements, and therefore social law.

"In that case, if Brussels were to impose new solvency rules on all occupational pension schemes, such legislation would not be a pure prudential matter, but also a labour and social matter," Briganti said.

He concluded that the IORP Directive should not be classified solely as internal market legislation but also social legislation.

This position, he said, has two consequences.

First, the European Commission's directorate general of Employment and Social Affairs should have been involved in the revision.

Second, the EU should follow the specific and more stringent provisions concerning the EU lawmaking process in Social and Labour issues as provided by the current Treaty on the Functioning of the European Union.