EUROPE - Directive 2003/41/EC on the activities and supervision of institutions for occupational pension schemes - the pension directive - is now in force across the 25 member states of the European Union.

It's now two years since the long-awaited directive was published in the EU's Official Journal, giving states 24 months to implement it.

"This directive lays down rules for the taking up and pursuit of activities carried out by institutions for occupational retirement provision," says the 12-page directive.

Critics say that only 10 states have notified the European Commission they have transposed the directive into national law.

The European Federation for Retirement Provision says: "It is possible that even this formal snapshot may be too rosy. Six notifications are incomplete and notification alone is no guarantee of correct implementation."

EFRP chairman Jaap Maassen called on Internal Markets Commissioner Charlie McCreevy to dedicate sufficient resources to monitoring the implementation of the funds directive. He said that only 'full and correct implementation' will deliver its intended benefits.

McCreevy has told IPE that 20 member states would be "on board" with the directive by the end of the year. He told the Irish Association of Pension Funds that there would be a review next year to consider any problematic issues.

The EFRP stressed that the directive's principle-based nature should not be confused with a lack of legal clarity "providing excuse for delay or, even worse, divergent transposition".

The EFRP also warned against using the life insurance directive as a model. "The pension funds directive has taken a long time coming," it said, "so member states have had long enough to think about the issues it raises."

Maassen added: "This directive does throw up very fundamental issues about the relation of the market to social policy."

He acknowledged that many states are overhauling their pension systems - with the implementation of the directive part of a much wider, highly political project.