Trade associations PensionsEurope and the European Association of Paritarian Institutions (AEIP) have issued their responses to the European Insurance and Occupational Pensions Authority’s (EIOPA) consultation on technical advice for the review of the IORP II Directive.

PensionsEurope welcomed EIOPA’s perspective, noting that the review of IORP II takes place shortly after the directive’s implementation, which it said made it premature to suggest any significant revisions at this stage.

In its response, it called for the directive to remain a minimum harmonisation legislation and for it to be highly compliance with the principles of proportionality and subsidiarity.

Furthermore, PensionsEurope stated that changes in cross-border rules should not have any negative impact on cross-border IORPs, while any new requirement on sustainability, diversity and inclusion should be “tailored to the specificities of IORPs”.

The association added that member communications could be improved and that national pension tracking services were a viable option.

Meanwhile, AEIP said that while it appreciated that EIOPA did not foresee changes to the minimum harmonisation character of the directive and welcomed the consultation’s consideration of venues to enhance proportionality, it emphasised the need for a more comprehensive consideration of this principle in EIOPA’s guidance.

It warned EIOPA against a scenario that would see the directive become applicable only to larger IORPs and against restricting national competent authorities from using size and internal organisation criteria when applying proportionality.

To enhance communication with members and beneficiaries, AEIP proposed granting more freedom to pension funds in delivering layered information.

AEIP called for the further development of digital tools, including national pension tracking systems.

The association warned that translating the integration of sustainability factors into a single investment policy remained challenging and cost-intensive, noting that many IORPs already have ambitious responsible investment policies in place.

Therefore, it stated that a principle-based consideration of double materiality under the prudent person rule would align with the investment practices of numerous pension funds.

Commenting on the consultation, PensionsEurope secretary general, Matti Leppälä, said: “The implementation of the IORP II Directive increased costs significantly, especially for small and mid-sized IORPs.

“Therefore, due consideration should be given to every individual cost increase and their aggregate impact on IORPs.”

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