The calm comes before the storm. Almost two months of holiday have just gone by, and the European Commission is back this month with one major task – make a legislative proposal for the revised IORP Directive.
Last May, Michel Barnier, the commissioner for internal market and services, said that while the introduction of pillar one would be postponed, a new set of rules will be presented under pillars two and three of the directive sometime in the autumn.
The only question remains when? Nobody knows the exact date, but a few signs suggest an announcement would be made around October.
First, many pensions organisation in Brussels believe the revised IORP Directive was drafted months in advance and is ready to go. It is now just a matter of amending it slightly, taking into consideration the temporary suspension of pillar one. Publishing a legislative proposal around that time would give the Commission a few weeks between now and October to finalise its proposal.
Second, the Commission will take time to assess the outcome of the impact study PensionsEurope conducted earlier this year. Brussels asked the association to conduct an analysis of the potential administrative burden of pillars two and three amongst its members.
A set of questions was sent to IORPs in Austria, Belgium, Finland, Germany, Italy, the Netherlands, Norway, Spain, Sweden and the UK. But the association stresses that it received very few responses from IORPs, as many issues arose during the process. “This process was costly for IORPs,” PensionsEurope said, “and the uncertainties contained in the questionnaires, combined with difficulties for each jurisdiction to interpret EIOPA’s advice requirements, render the process very difficult.”
It nonetheless collected the data and sent its conclusions to the Commission early in the summer. How the Commission incorporates the remarks into the legislative proposal on pillars two and three remains to be seen.
But the study conducted by the association reflects at least one thing. The Commission is willing to receive input from the industry. This, in turn, suggests Barnier and his team will carefully review and amend their proposal taking into account PensionsEurope’s conclusions before making any public announcement.
One question remains, however. What will be the next step following Barnier’s announcement? Again, nobody seems to be able to shed more light on that. Officials in Brussels were unavailable for comment at the time this article went to press.
Neither was the European Insurance and Occupational Pensions Authority (EIOPA) in Frankfurt able to provide more details on what plans and timeline the Commission will set.
A spokeswoman for the authority said EIOPA was waiting for more guidance from Brussels, and would continue to conduct its own research on the revised IORP in the meantime. “We believe several issues within the directive need further attention and work,” she said. “We therefore work on this matter independently and on our own initiative.”
However, to follow the legal procedure set under the EU treaties, it is logical to assume that, once the Commission adopts the draft legislative proposal for the revised IORP Directive, the text will then be sent to the national parliaments of the EU member states, the European Parliament and the Council. The proposal will have to be approved by both the Parliament and the Council before the Directive comes into law.
This should not trouble the Commission much. While a proposal including all three pillars of the revised IORP Directive would have most certainly courted failure in the Council due to the opposition of five countries – Belgium, Germany, Ireland, the Netherlands and the UK – a text containing rules on just governance and transparency will be far more acceptable. The end of this year and the beginning of next will show for certain whether Barnier has been successful in his task of introducing new rules for occupational pension funds in Europe.