IORP Directive impacts EU

The EFRP presented the results of a market survey conducted in the second semester of the year, at today’s European Pension Funds Congress in Frankfurt.

Chris Verhaegen, secretary general of EFRP, said: “The prime objective of this survey was to find out the level of change – real or as perceived by market participants – that this directive had brought about at Member State level.”

The EFRP said participants’ perception was that overall there had been a significant impact. It said there had been three triggers, the first being the prudent person rule, which generated debate during the implementation process in most Member States and, while not fully eradicating quantitative restrictions, had led to a liberalised investment regime.

The second trigger was the minimum harmonisation rules for prudential supervision, these requirements not only fuelled a dialogue with supervisory bodies but also with the national regulators on the role and powers of the pension supervisor. EFRP said it had resulted in more sophisticated regulation and supervision.

Finally, the European passport, which introduced the free provision of services and establishment for IORPs, essentially pension funds, sparked debate and led some Member States (Belgium, Ireland, Luxembourg and the Netherlands) to devise specific legislation to become prime locations as home countries to pan-European pension institutions, according to the survey.

Verhaegen added : “All in all though, the impact of the IORP Directive was judged as positive. Even some beneficial effects on pensions policy were reported; the directive sparked debate on pensions policy and put it in a less catastrophic context than the rhetoric about 'pensions time bomb'."

Verhaegen stressed that the protracted implementation period had meant that it was too early to judge the full potential of the Directive.

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