Sections

IORP Directive must not 'unpick' pension systems, rapporteur warns

The European lawmaker appointed as rapporteur for the IORP Directive has warned that the law must not damage existing pension systems and insisted he would take time to engage with stakeholders as he drafted his report on the legislation.

Brian Hayes, an Irish MEP and member of the Economic and Monetary Affairs committee (ECON), said it was vital that the European Parliament took its time while drafting an opinion on the IORP Directive, the basis of the chamber’s negotiating position ahead of talks with member states and the European Commission next year.

Speaking at the Brussels launch event for the TTYPE project’s report into a European pension tracking service (ETS), he said it was important the revised Directive not “unpick” systems that had been successful.

“We are not going to rush this – this is going to be a piece of legislation we are going to take our time with because it’s crucially important we get this right,” he said. 

He also distanced himself from the notion there should be a single rule book across the common market, insisting he did not believe in a ‘one size fits all’ approach.

“Ultimately, in my view, [IORP II] cannot be so prescriptive as to cut across the success that many countries have in this area,” he said.

Instead, successful pension systems should be seen as “gold-plated benchmarks” to which other pension systems should aspire.

Hayes also praised the Italian government for achieving consensus between member states for an IORP negotiating mandate that emphasised the relaxation of prudential regulation for cross-border pension funds, after the Commission seemingly dropped such changes from its final draft in March last year

“It’s not an exaggeration to say [there was] a fair degree of surprise when the Council [of the EU] came to their general approach on this, and it’s obviously a huge success for the Italian presidency that they did that, and they should be congratulated on that,” he said. 

Hayes said it would be important to reflect the Council’s “very strong view” in the upcoming discussions on IORP II.

The MEP said he would publish a working document on IORP II in April, followed by a public hearing of ECON in May. 

His own report would then be published shortly before the Parliament’s summer recess, with amendments from his fellow ECON members discussed once Parliament returned – resulting in a timeline that was unlikely to see Parliament reach a position before the end of the year.

Speaking on the same panel, Jeroen Lenaers, the Employment and Social Affairs committee’s IORP rapporteur, said the proposed ETS was something that could quite easily fit into IORP II.

“But then we have to make sure that whatever we agree on, this recast of the IORP Directive does not make such a system impossible,” he said.

He expressed his surprise that the Commission’s initial proposal for a Pension Benefit Statement (BPS) had sought to limit it to two pages, “especially if you then, as a legislator, need six pages to tell everybody what needs to be in the Pension Benefit Statement”.

Instead, he suggested that any rules should be flexible enough as to allow member states to adapt the rules to their individual needs.

A draft report published by Lenaers earlier this month called for the revised IORP Directive to emphasise the introduction of occupational schemes in countries in which such a system had yet to develop, as well as the launch of a European pension working group.

Have your say

You must sign in to make a comment

IPE QUEST

Your first step in manager selection...

IPE Quest is a manager search facility that connects institutional investors and asset managers.

  • QN-2519

    Asset class: Fund wrapper.
    Asset region: Global.
    Size: EUR 80m.
    Closing date: 2019-03-29.

Begin Your Search Here