Occupational Retirement Provision

The Commission’s proposals improve protection of pension beneficiaries

The European Commission has published its proposals for a revision of the Directive on the activities and supervision of Institutions for Occupational Retirement Provision (IORP Directive). These proposals call for example for expanded notification and reporting duties for pension providers such as pension funds and Pensionskassen. In this way, the Commission hopes to increase transparency and security in occupational pensions.

The German Insurance Association (GDV) welcomes these proposals and stands behind the goals of the legislative project. “The EU Commission’s plans are an important step towards strengthening occupational pensions in Europe,” said GDV Executive Board Chairman Jörg von Fürstenwerth. Those with occupational pension coverage must be placed in a position where they can accurately assess the value of their pension coverage, as well as the risks and opportunities. At the same time, they should be able to rely on the fact that the pension institutions will be able to keep its commitments, said von Fürstenwerth.

Dr. Jörg Freiherr Frank von Fürstenwerth

Jörg von Fürstenwerth
Executive Board Chairman, German Insurance Association (GDV)

“”The EU Commission’s plans are an important step towards strengthening occupational pensions in Europe”.

Expanded reporting to regulatory authorities.
In particular, the proposals call for mandatory annual statements. They also include stricter reporting, risk management and organizational (governance) requirements for pension institutions. For example, providers of occupational pension coverage will have to introduce a system which allows for clear identification, analysis, assessment and management of risks. At the same time, companies are to name key functions and fill them with professionally qualified people. The proposals also call for expanded reporting to regulatory authorities. In substantive terms, the new rules are based on the requirements of the insurance regulation system.

However, full application of the rules for insurers to occupational pension institutions is not justified, von Fürstenwerth stresses. “The rules must take into account the unique circumstances of occupational pensions.” These circumstances include, for example, the pension institutions’ option of cutting benefits and requiring additional contributions from the employer.

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