The European Parliament has dropped a plan to require pension funds to invest in venture capital under IORP II, but will back the removal of national rules for how much can be allocated to different asset classes.
According to a draft text of its negotiating position circulating this week, Members of Parliament (MEPs) have not backed a proposal made by rapporteur Damian Boeselager to force pension funds with more than €1bn under management to allocate 2% of those assets to venture capital.
However, the document suggests it will support the European Commission’s plan to ban member states from imposing limits on how much pension funds in their countries can invest in different asset classes.
The Commission wants to remove national quantitative limits – often focused on stopping pension capital from being heavily invested in high-risk or illiquid assets – in a bid to encourage more money to flow into innovative areas of the European economy.
In its negotiating position, which was signed off in June, the European Council confirmed it would fight to protect member states’ right to set such limits, but Parliament appears to be aligning with the Commission.
The draft also maintains a clause that would require pension funds to consider the sustainability preferences of their members when designing investment policies and strategies.
In other areas, Parliament looks set to oppose the Commission’s legislative proposal.
For example, it has removed a number of elements that would give the European Insurance and Occupational Pensions Authority (EIOPA) a bigger role in setting guidelines for pension funds, including by developing a template to standardise the disclosure of pension benefit statements across the bloc.
This week’s draft is expected to form the basis of Parliament’s final negotiating position, which is currently scheduled to be signed off at a committee vote on 10 November.
Approval by wider Parliament will follow shortly afterwards, and trilogues are expected to commence in January.
