A compromise on the revised IORP Directive has been reached, IPE understands, even though “discussions” are still said to be ongoing.

Word on the margins of a PensionsEurope conference in Brussels today, 23 June, is that a compromise has been reached but that a formal announcement is being held back because of the EU referendum in the UK.

Negotiators met last week for a trialogue meeting, and there has been talk of another meeting next week.

It has been unclear to some in the industry whether this forthcoming meeting, if it goes ahead, will be to tie up technical matters or whether matters of substance must still be resolved.

The second IORP Directive came up on several occasions during the PensionsEurope conference, but little has been given away by those in the know.

Martin Flier, deputy director-general of employment and pensions in the Dutch Ministry of Social Affairs and Employment, made it clear to delegates that he would not be drawn on the state of play concerning the directive, negotiations for which are being overseen by the Dutch government while the Netherlands holds the rotating presidency of the Council of the EU.

The Netherlands has been keen to conclude negotiations on IORP II before the end of June, at which point Slovakia assumes the presidency.

“It would, of course, be quite tempting to lift a corner of the veil, to make some tantalising remarks or innuendos,” Flier said in a keynote address.

“But, as president, as the representative of all member states, this is exactly what I cannot do today. The mantra is ‘nothing is agreed until everything is agreed’.

“We haven’t finished our discussions on IORP quite yet, and all I can say is that we hope we can bring this process to a good end during the Dutch presidency.”

Jonathan Hill, European commissioner for financial stability, had earlier referred to expecting “a final IORP agreement soon”. 

Janwillem Bouma, chair of PensionsEurope, had also earlier said the association welcomed the progress made in the trialogue negotiations on IORP II.

“Particularly,” he said, “we have been pleased the IORP II Directive will not contain additional solvency capital requirements for IORPs, which could have had significant negative impacts on IORPs, sponsors and members.

“We look forward to receiving the final text of the IORP II Directive soon.”

He welcomed the decision by EIOPA not to proceed with a harmonised solvency framework for occupational pension funds but criticised the authority’s proposal for the introduction of a standardised risk assessment for IORPs, saying “the mandatory use of a common framework balance sheet is impractical, unnecessary and costly”.

He added: “It is doubtful whether the outcomes of the common framework balance sheet have any additional use to national financial assessments in day-to-day supervisory practice.”

He suggested this amounted to EIOPA’s introducing harmonised capital requirements for IORPs at the EU level “by the back door” and went on to make an analogy to illustrate the dangers of such rules creeping in.

“Let me explain,” he said. “If you put a frog in cold water and slowly heat it up, the frog does not perceive a danger and will eventually be boiled alive.”

“It is the same for pensions,” he said, in the sense that a proposal or rule can be harmless on its own, but that “over time, the pension scheme is cooked”.