Commission to review fiduciary duties and stewardship rules of IORP II

The European Commission will be reviewing the fiduciary duties and stewardship of occupational pension schemes as part of its review into the IORP II Directive.

Speaking at the launch of European Retirement Week today, 29 November, European Commissioner for financial services, financial stability and the capital markets union (CMU), Mairead McGuinness, gave an update on the upcoming IORP II review.

“Like the insurance sector, pension funds hold assets worth trillions of euros and play an important role in capital markets – you will know that the prudential rules for the pensions sector are set out in the IORP II Directive,” she said.

“This directive has improved the rules on governance, information provision and cross-border business, benefitting both providers and beneficiaries. It was one of the first pieces of new financial services legislation, referring to environmental, social and governance (ESG) risks. While we still need to see how these rules work in practice, we will consider the need for further steps as we prepare the next review of the directive.”

In particular, she said the commission will assess whether the fiduciary duties and stewardship rules of pension funds should be clarified to increase their contribution to European green deal targets.

McGuinness also touched on another piece of European legislation that is set to transform the pensions market – the regulations for pan-European personal pension (PEPP) products, which go live in March 2022.

“Occupational retirement provision has proved to be a well-established and highly successful tool in many European countries. It can reduce the burden on national pension systems and ultimately provide large groups of employees with a safer and higher pension income.

“To complement what is happening at a national level, the commission wants to ensure citizens also have a pan-European option to save for retirement. The pan-European personal pension product is a voluntary personal pension scheme, designed to give savers more choice, provide them with competitive products and maintain strong consumer protection,” she noted.

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