As we begin 2025, European Pensions considers some of the key things to look out for this year.

DORA implementation

The 17th of this month will see the Digital Operational Resilience Act (DORA) come into force. DORA aims to create a more coherent and comprehensive framework from an often disjointed, patchwork set of rules scattered across different sectors and EU countries.

The hope is that this will bolster the IT defences of the region’s financial service firms in the event of a serious disruption, such as a cyberattack, by focusing on five key areas. These include ICT risk management, ICT-related incidents, digital regulation, operational resilience testing, third-party risk and information sharing.

Despite the forthcoming deadline, the end of 2024 saw the European Supervisory Authorities (EBA, EIOPA and ESMA – ESAs) urged to issue no-action letters to national competent authorities (NCAs) on DORA enforcement due to legal uncertainties.

PensionsEurope and the European Association of Paritarian Institutions (AEIP) sent a letter to the ESAs to “respectfully ask” them to make contact with NCAs “as soon as practicable, ahead of the 17 January 2025 date for DORA’s entry into application”.

IORP II Directive review

It has been over a year now since the European Insurance and Occupational Pensions Authority (EIOPA) provided its technical advice to the European Commission on the IORP II Directive in October 2023.

Although the European Commission’s preliminary work on the IORP II Directive review has commenced, a proposal on the directive could be issued anytime during the 2024-2029 Commission mandate. No indication has yet been given on when that might be.

Recently, however, European Commission DG FISMA, director, horizontal policies, Marcel Haag said the review of the IORP II Directive should be part of a more “comprehensive approach” towards the European Savings and Investment Union.

The Savings and Investment Union is a new initiative that is hoping to build on the work of the Capital Markets Union, which launched in 2014 and aimed to create a single market for capital in the EU.

EIOPA chair, Petra Hielkema, also said last year that the review will not bring “big change” to cross-border pensions.

PEPP development

In September 2024, the European Insurance and Occupational Pensions Authority (EIOPA) published a paper on possible reforms to the pan-European personal pension (PEPP) product after its chair, Petra Hielkema, had admitted the PEPP, in its current form, has not been a success.

Its staff paper set out the authority’s suggested improvements to the PEPP’s design, with the aim of overcoming supply-side, demand-side and structural barriers hindering its broader adoption. As part of its demand-side fixes, EIOPA proposed the introduction of auto-enrolment for a personal pension scheme, like the PEPP, at the EU level.

It has sparked a new conversation on the future of the PEPP, which is due to be reevaluated in 2027.

“EIOPA looks forward to engaging in discussions with stakeholders on the above proposals and to developing specific policy proposals ahead of the scheduled evaluation of the PEPP Regulation in 2027,” the authority stated.

One organisation has already made its opinion known - German pension association Arbeitsgemeinschaft für betriebliche Altersversorgung e.V. (ABA). It said it does not believe that a revised PEPP will “substantially contribute” to counteracting the growing pension gaps in many EU member states.

Irish auto-enrolment launch

Will 2025 be the year that Ireland finally rolls out auto-enrolment? Going by the government’s current plans, the scheme is set to launch on 30 September 2025.

The scheme has faced numerous setbacks over recent years but significant progress was made in 2024. Last year saw the AE Bill finally receive approval by the Dáil and Tata Consultancy Services (TCS) simultaneously selected as administrator to the scheme.

The long-awaited bill paves the way for the creation of an automatic enrolment pension system in Ireland, with 800,000 workers set to be enrolled into the scheme. It aims to increase pension coverage and overall pension adequacy in Ireland. Ireland is the only OECD country that does not yet operate an auto-enrolment or similar system as a means of promoting pension savings.

However, the Irish government has a huge amount of work on its hands if a 30 September launch is to become a reality. The Department of Social Protection (DSP) is now working on establishing the National Automatic Enrolment Retirement Savings Authority (NAERSA) and the procurement of investment managers.

Dutch pension transition

The deadline for all schemes to transition to the new Dutch pension system is 1 January 2028 but with many setting 1 January 2026 deadlines, this year will see schemes ramp up their preparations for the transition.

Indeed, Stichting Beroepspensioenfonds Loodsen, the Dutch pension fund for pilots, became the first scheme to be given approval by De Nederlandsche Bank (DNB) to transition from 1 January 2025, and it has now confirmed that the new scheme has been adopted. Two other pension funds, PWRI and APG, also received approval from DNB to transition this month.

Commenting on the transition, Aon Netherlands director wealth, Frank Driessen, said: “The pressure on the sector is huge. There is an awful lot involved in the transition; besides agreeing the total package, calculating it, also setting up the IT systems and communicating about it. It is a tough job, but the industry should be proud of what has been achieved last year.”


Finnish pension reform

We don’t have long to wait until the outcome of the Finnish pension reform is revealed. The country’s Prime Minister, Petteri Orpo, set out his plan for reform in the June 2023 Government Programme, tasking the social partners with making reforms equating to 0.4 percentage points of GDP, around €1 billion.

In October 2023, the social partners and ministries formed two working groups and they have until 31 January 2025 to present their agreement. If no agreement is reached, then the government will implement its own proposals.

The working groups have remained tight-lipped about any potential reforms, but changes to the solvency ratios of the earnings-related pension companies, or the introduction of a third automatic stabiliser have been mooted – although what a third automatic stabiliser would look like is unknown.

European Pensions will bring you updates on these and more throughout 2025.

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