Members of the European Parliament discuss new rules on occupational pensions.

At the beginning of September, the European Parliament’s Committee on Economic and Monetary Affairs (ECON) once again considered the planned revision of the European rules on institutions for occupational retirement provision (IORP II Review). The discussion focused on the amendments tabled by the political groups to the European Commission’s proposal.

Against the backdrop of demographic change and increasing pressure on pension systems, the Commission aims to strengthen occupational retirement provision across Europe. It is intended to help provide citizens with a broader basis for their retirement income. At the same time, the capital accumulated through occupational pension schemes should be mobilised more effectively for investment in the European economy, thereby contributing to growth and innovation.

However, views in the European Parliament differ on how the new rules should be designed in practice.

National systems should be taken into account.

Across all political groups, there was broad agreement that the role of the Member States in pension policy must be safeguarded. Rapporteur Damian Boeselager (Greens/DE) stressed in this context that statutory pensions cannot and should not be replaced by occupational pensions. The political groups also emphasised that well-functioning national occupational pension schemes must not be undermined.

Views differed, however, on the extent to which common European rules should apply. Shadow rapporteurs Anouk van Brug (Renew/NL) and Adnan Dibrani (S&D/SE) supported a minimum level of common rules while ensuring sufficient national flexibility. Dibrani stressed in particular the importance of transparency in strengthening the confidence of insured persons. Shadow rapporteur Dirk Gotink (EPP/NL), by contrast, argued against harmonising well-functioning national systems.

Diverging positions on investment

Different positions also emerged on the question of how occupational pension assets should be invested in the future. In particular, the discussion focused on how investment in higher-risk assets could be reconciled with the objective of achieving stable long-term returns in the interests of beneficiaries.

Dirk Gotink and Adnan Dibrani opposed mandatory investment in venture capital and placed the interests of beneficiaries at the centre of their considerations. Gotink pointed out that pension funds are already major investors in sustainable and innovative sectors and should not be held responsible for closing Europe’s investment gap.

Damian Boeselager, by contrast, stressed that investment in innovative companies could form part of a broadly diversified investment portfolio. In his view, such diversification could contribute to more stable returns for savers.

What happens next?

On the basis of the amendments tabled, rapporteur Damian Boeselager will now negotiate a compromise text with the shadow rapporteurs of the political groups. The text is expected to be put to a vote in the ECON Committee on 15 October.