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28 January 2016

Report on the proposal for a directive of the Parliament and of the Council on the activities and supervision of IORPs

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The European Parliament has agreed a reformed draft report on Institutions for Occupational Retirement Provision.

Following the opinion of the Consultative Working Party, which has examined the recast proposal, the Committee on Legal Affairs considers that the proposal in question does not include any substantive changes other than those identified as such in the proposal or in the opinion of the Consultative Working Party and that, as regards the codification of the unchanged provisions of the earlier acts with those changes, the proposal contains a straightforward codification of the existing texts, without any change in their substance.

More countries should consider setting up complementary second-pillar pension systems which should lead to more secure pension benefits. But given the experiences of the economic and financial crisis, good supervisory and governance rules are adamant to give people a high degree of confidence in their pension system and to motivate them to participate in such a system. Therefore, the recast of this directive - under the condition that is has the right focus and does not introduce unnecessary burdens - should be instrumental in encouraging Member States to develop occupational retirement pension systems in which people can have confidence.

The rapporteur fully understands the need to ensure good governance, information to scheme members, transparency and safety of the occupational retirement provision. Institutions for occupational retirement provision are pension institutions that serve - first and foremost – a social purpose and which bear a heavy responsibility for the provision of occupational retirement benefits.

However, pension systems vary widely across Europe and are closely connected to national traditions and national fiscal, social and labour law. Therefore, a Europe-wide one-size-fits-all approach will not lead to the desired outcomes and will not be efficient in helping to meet the objective set out in this directive.

That is exactly why the rapporteur feels that it is important to provide Member States with sufficient flexibility to implement and regulate the requirements set out in this directive in a way that reflects the wide variety of pension systems in Europe and that suits the specific way in which national systems are organised, all in the best interest of members and beneficiaries. This is all the more important as, in accordance with the principle of subsidiarity, Member States should retain full responsibility for the organisation of their pension systems as well as for the decision on the role of each of the three "pillars" of the retirement system in individual Member States. In the context of the second pillar, they should also retain full responsibility for the role and functions of the various institutions providing occupational retirement benefits.

Full report

© European Parliament

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