A European parliamentarian has spoken of the “pretty big row” brewing over European Commission attempts to designate IORPs as ‘financial services providers’, after the language was roundly rejected by both main committees scrutinising the revised IORP Directive.
Thomas Mann, a German centre-right MEP and member of the Employment and Social Affairs Committee (EMPL), nevertheless said he was hopeful parliamentarians would get to vote on a finalised version of the Directive before the summer recess, predicting the law would be finalised by June at the latest.
Speaking at the annual conference of the German pension fund association, aba, Mann said he hoped the work done by the EMPL committee and the Economic and Monetary Affairs Committee (ECON), of which IORP II rapporteur Brian Hayes is a member, would not be in vain once the trialogue negotiations between the Parliament, European Commission and member states concluded.
Mann was upbeat on the trialogue negotiations despite conceding there was still appetite on the part of the Commission to use delegated acts to finalise aspects of IORP II – an approach rejected by EMPL and ECON due to the risk, as Mann saw it, of the acts being used as a “Trojan horse” to introduce capital requirements for pension funds.
He also alluded to a “pretty big row” over the definition of ‘pension funds’, with attempts to re-insert the Commission’s preferred language branding them ‘financial service providers’.
Mann explained that retaining language referring to funds as institutions with a social purpose – backed by member states and, to a lesser extent, Parliament – was very important.
“ECON chose a slightly vaguer phrase, and I know some have a hard time living with the wording,” the MEP said of the final version of Hayes’s report, stressing the need for compromise.
Hayes’s final report replaced a reference to IORPs as ‘financial service providers’ with one noting they “[served], first and foremost, a social purpose”.
The MEP nonetheless seemed hopeful a finalised version of the Directive could be put to vote during the European Parliament’s plenary session in May.
He added: “I hope that, by the end, we’ll be able to say the effort, all the detailed negotiations, were worth it.”