Finland to widen IORP into DC
FINLAND - Finland is set to extend the implementation of the European pension fund directive (IORP) to cover defined contribution schemes, according to Matti Leppälä of the Finnish Pensions Alliance (TELA).
"Finland implemented the IORP directive at the minimum level," Leppälä said in an interview with IPE.
The IORP only covers the existing supplementary industry-wide or corporate pension funds, which are all defined benefit (DB) schemes.
Defined contribution (DC) pensions can currently only be offered by life insurance companies as collective insurance or other European IORP pension funds, creating obstacles for second pillar schemes.
"Of course, the pension providers who have second pillar pensions see the situation as not having the same possibilities, it is not a level playing field for them," said Leppälä.
"The second stage of the directive will most likely include the possibility for DC schemes as well, in addition to the company and industry-wide pension funds, so most likely it will also available for insurance companies," he added.
The Finnish Social Affairs Ministry has set up a working group with representatives of the social partners, which is "drafting the second stage of the implementation of the directive," said
Leppälä, director of international and legal affairs at TELA.
The working group is negotiating the governance model in particular, explained Leppälä.
"In the negotiations, the role of the social partners in these funds is open, and they haven't agreed yet," he said.
However, he is adamant they will come to an agreement by the end of June, when the group is set to publish its conclusions.