IORP Directive

The IORP Directive1 is the European prudential framework for institutions for occupational retirement provision (IORPs) or pension funds. The adoption of the IORP Directive in 2003 acknowledges the importance of workplace pensions in supplementing declining public pension benefits.

The objective of the IORP Directive is to provide a prudential framework for pension funds based on minimum harmonisation and mutual recognition. It enables the establishment of pan-European pension funds that manage the pension schemes of employees in different member states. A cross-border pension fund is only subject to the prudential regulation of the home member state. But the pension fund also has to comply with social and labour law of the host member state, which is most likely the country where the employees actually work.           

The IORP Directive is a modern, comprehensive prudential framework designed to secure the retirement income of Europe's citizens. It lays down that pension funds should:

  1. have sufficient assets to cover pension commitments 
  2. possess professionally qualified governing bodies, sound administrative procedures and adequate internal control mechanisms
  3. be transparent towards plan members by clearly communicating the target level of benefits, risk exposure and investment management costs

EFRP was very much involved in shaping the IORP Directive. In 2007, it was finally implemented by all member states and the first pan-European pension funds are now seeing the light of day. EFRP will continue to devote itself to ensuring that the IORP Directive is able to deliver its full potential in the years ahead.  

 

See also:

EFRP Response – European Commission Consultative Document – Ares(08) 14767 – November 2008
EFRP Paper – Funding and Solvency Principles for IORPs – May 2008
EFRP Leaflet – EFRP survey on IORP Directive implementation – November 2007
Legal Commentary on the Pension Funds Directive [dir. 2003/41/EC] – October 2004
EIORP 2005 Report – European Institutions for Occupational Retirement Provision – the EFRP model for pan-European pensions – October 2003
A European Institution for Occupational Retirement Provision (EIORP) – July 2000
 

1 Directive 2003/41/EC, 3 June 2003 on the activities and supervision of the institutions for occupational retirement provision, OJL 235, 23/09/2003

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