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Hayes defends IORP full-funding proposals for all pension funds

Brian Hayes, the MEP in charge of the revised IORP Directive’s passage through the European Parliament, has defended amendments that would see full funding imposed on all European pension funds.

Speaking at a meeting of the Economic and Monetary Affairs Committee (ECON) earlier this week, the IORP rapporteur argued that his proposed amendments would make the Directive a “principles-based” piece of legislation that distanced itself from the European Commission’s preferred ‘one size fits all’ approach.

Hayes, an Irish MEP, noted that he had put forward changes covering the full funding of schemes, which, under the 2003 Directive, require cross-border entities to be fully funded at all times.

Addressing the committee’s chair, Hayes said: “As we heard during our public hearing, [full funding] is one of the greatest obstacles for cross-border activity.


“In my report, I have proposed that all IORPs – cross-border and domestic – should be fully funded at the moment the IORP starts funding a new, or an additional, scheme.”

James Walsh, EU policy lead at the UK’s National Association of Pension Funds, previously warned that the amendment put forward by Hayes risked impacting companies that were consolidating individual funds after a merger.

He also questioned whether changes to a scheme’s deeds or new accrual rate would risk being seen as the launch of a new fund.

“It’s a question for lawyers, but you could make the case that it constitutes a new scheme,” he told IPE in July.

Hayes also argued that the revised IORP Directive should at no point become a “bureaucratic nightmare” for funds, and insisted it would not inflict additional costs on pension funds or members.

However, the MEP did argue in favour of greater harmonisation of pension transfer activity, an area the Commission’s initial proposal had only sought to tackle by addressing cross-border transfers, arguing the changes would make transfers “safer”.

“We should not have a lower standard in member states than that which applies at a cross-border level,” he said.

“This is ultimately in the interest of members and beneficiaries.”

Readers' comments (1)

  • There is utter confusion regarding.

    ..'fully funded at all times for 'new schemes' and maintaining a guiding principle of IORP being rooted in social and labur law and has a social function'

    because of what is actually happening to those in occupational IORP cross border scheme in Ireland

    Pensions in a non segregated Irish DB cross border scheme has reduced current pensions in payment for the 70/80 and 90 year old pensioners to meet Pension Authority solvency rules in 25 years time . However this only applies to Irish pensionable service and excludes other European countries pensionable service. This was done without their consent.

    Has anyone drafting or discussing these new proposals considered what is actuarlly currently happening -

    it is certainly not in the interest of the members or their beneficiaries drawing down pensions -

    I does not encourage anyone to consider investing for the long term.

    Or is Ireland unique in cutting the income of current pensioners in IORP Defined Benefit multi aviation employer pension schemes.

    Where is the current IORP fully funded protection for those drawing down their pension having contributed to a compulsory employer occupational IOPR pension scheme for over 40 years

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