EU member states have agreed a negotiating position on plans to update rules for workplace pension funds, setting the stage for talks with the European Parliament.
The changes would revise the EU’s framework for occupational pension funds — known in EU law as institutions for occupational retirement provision, or IORPs — which pool and invest money to provide retirement benefits for employees, the Council of the EU announced on Friday.
It said the review of the IORP II directive focuses on clearer information for scheme members on costs and returns, stronger risk management, and removing barriers that can make it harder for funds to invest efficiently, including across borders.
Makis Keravnos, Cyprus’s finance minister, said the agreement was a step towards removing obstacles that hinder investment in the area.
What the Council wants changed
The Council noted it is keeping several elements from the European Commission’s proposal, including measures intended to support cross-border activity by occupational pension funds and improve co-operation and information exchange between national supervisory authorities.
It said it also maintains a “prudent person principle”, meaning investments should be made with an appropriate level of risk, alongside provisions on multi-sponsor pension funds and operations that run multiple schemes.
Under the Council’s position, member states would have flexibility over how the directive applies — to the pension fund itself, the authorised entity operating it, or both — provided assets are legally separated.
The Council also backed raising the threshold for investing in shares and corporate bonds on regulated markets to 100%, while allowing countries to keep stricter limits if they choose.
It revealed it has removed some elements from the Commission proposal, including provisions on sending information to pension tracking systems, assigning certain tasks to EU-level supervisory bodies, and introducing “supervisory dialogues” between funds and authorities.
The Council’s mandate allows it to start negotiations with the European Parliament once MEPs have agreed their own position.
Occupational pension funds held almost €3 trillion in assets, the Council pointed out.
