Damian Boeslager, the politician in charge of the review of the EU’s pension fund legislation for the European Parliament, has proposed a minimum venture capital (VC) allocation requirement in his initial position on the reform.
Boeslager, co-founder of the political party Volt, which sits with the Greens in Parliament, submitted his report on the European Commission’s IORP II review proposal last week.
At the time of writing it had not yet been made public due to being translated, but according to a copy seen by IPE the MEP has introduced an amendment that would require EU pension funds with more than €1bn in assets under management to invest at least 2% of these assets in VC, “in accordance with the prudent person principle and in a manner consistent with the interests of their members and beneficiaries”.
The amendment is described as a direct response to the Draghi and Letta reports on EU competitiveness and capital market fragmentation, and as “calibrated mobilisation, not [a] blanket mandate”.
The proposal is highly unlikely to gain traction, according to one source, suggesting this was due to matters of principle – “political mingling” – and because the allocation target isn’t feasible.
A recent report from Pensions for Purpose and European Women in VC cites 0.12% as the figure for European pension funds’ allocation to VC, although the source for that figure isn’t entirely clear.
Dutch pension fund ABP is backing an EU tech scale-up initiative as a potential founding investor, with the European Innovation Council having recently announced EQT as the fund manager for the €5bn Scaleup Europe Fund.
Productive investments
Elsewhere in his IORP II report, MEP Boeslager has proposed amending the European Commission’s proposal to “create a dedicated category of qualifying productive investments”, also in response to the Draghi and Letta reports, and the EC’s Savings and Investment Union agenda. These call for the deeper integration of capital markets and for pension funds, among other institutional investors, to contribute more to real economy financing.
As part of Boeslager’s plan, member states would be allowed to apply more favourable rules to certain productive investments, such as ELTIFs, infrastructure financing and EU taxonomy-aligned bonds.
With respect to the latter, Boeslager explains that no pension fund would be forced to apply the taxonomy framework’s do no significant harm principle, “but member states that wish to incentivise climate-aligned productive investment can do so within harmonised EU law anchoring the Taxonomy Regulation and its technical screening criteria avoiding duplication”.
Benchmarking, tracking systems
A move that is likely to be welcomed by European pension fund groups is that Boeslager proposes to remove a requirement about monitoring and reporting by pension funds in the event of underperformance against benchmarks.
IPE understands that member states are also proposing to scrap this provision, which has been opposed by industry groups such as PensionsEurope and the Dutch Pensions Federation.
Away from investments, Boeslager’s draft report includes proposals for pension tracking systems to become mandatory for member states to set up or designate, with pension benefit statements eventually to be abolished.
An interoperable Union-wide tracking system endorsed by EIOPA would be the most efficient long-term solution, according to the report.
Once translated, the report will be discussed within the European Parliament’s Committee on Economic and Monetary Affairs, with a vote on a compromise report expected on 15 October.
EU member states are further along with their deliberations, with working groups within the Council having already produced their first compromise text at the end of May.
Political negotiations between the Parliament and member states would begin in late 2026 or early 2027.
Boeslager’s office has been contacted for comment.
