AEIP publish its position on EIOPA’s technical advice on the IORP II review
In view of the upcoming evaluation and review of the IORP II Directive by DG FISMA, we publish today our position on EIOPA’s technical advice on the IORP II review, released in September 2023. AEIP commends DG FISMA and EIOPA for the opportunity to comment on the IORP II review and for the productive communication and constructive dialogue throughout the process.
We appreciate that EIOPA does not foresee changes to the minimum harmonization character of this Directive and welcome that the technical advice considers venues to enhance proportionality.
While AEIP recognizes that increasing thresholds for exemptions can benefit small IORPs, we caution against a situation where the IORP II Directive will become applicable only to larger IORPs. Additionally, we urge not to restrict NCAs from using size and internal organisation criteria when applying proportionality. Such criteria can provide legal certainty and predictability for IORPs and encourage a consistent approach.
Regarding cross-border procedures and activities, AEIP agrees that the next review should assess the need for improvements. However, it is essential to ensure that any changes do not interfere with national social, labour or tax law, nor have a negative impact on non-cross-border IORPs.
We support transparency and agree with EIOPA that the quality and readability of information made available also contributes to public trust in the pension sector. To enhance communication with members and beneficiaries, AEIP proposes granting more freedom to pension funds in delivering layered information. Moreover, fostering and supporting the development of digital tools is crucial. National pension tracking systems should also play a larger role as facilitators of the pension benefit statement.
AEIP acknowledges the importance of integrating sustainability factors into pension fund investments and agrees that the preferences of members and beneficiaries should be considered. However, translating these preferences into a single investment policy remains challenging and cost-intensive in practice. AEIP highlights that many IORPs already have ambitious responsible investment policies. Therefore, a principle-based consideration of double materiality under the prudent person rule would align with the investment practices of numerous pension funds. Fund boards must have sufficient flexibility to accommodate various viewpoints, particularly in paritarian pension funds established through collective agreements, where investment decisions always comply with the prudent person rule.
AEIP fully supports diversity and inclusion in management boards. In paritarian pension funds, IORP boards are appointed by social partners, ensuring the representation of diverse perspectives and interests. The ultimate goal should be to establish a truly inclusive and diverse culture and promote good governance, i.e. fit and proper criteria for board members.
To read the full AEIP position on the IORP II review please see here.