The IORP II Directive and pensions

The following Pensions practice note provides comprehensive and up to date legal information covering:

  • The IORP II Directive and pensions
  • Purpose of IORP II
  • Finalisation of IORP II
  • Key provisions of the finalised IORP II Directive
  • Cross-border transfers
  • No new solvency rules
  • Funding requirements for cross-border schemes
  • Definition of cross-border activities
  • The prime objective
  • Governance and disclosure requirements
  • More...

The IORP II Directive and pensions

Under EU law, pension schemes are referred to as Institutions for Occupational Retirement Provision (IORPs).

The Archived Directive (EU) 2016/2341, (Archived IORP II) on the activities and supervision of IORPs (IORP II) replaced the 2003 IORP Directive 2003/41/EC (repealed). It was adopted into EU law in December 2016 and was implemented into UK law on 13 January 2019.

While IORP II does not constitute retained EU law post-IP completion day (11 pm on 31 December 2020), the UK laws implementing it do constitute retained EU law and thus continue to apply in the UK post-IP completion day.

Purpose of IORP II

The repealed 2003 IORP Directive was adopted in June 2003 and was then implemented by individual states within the EU. It sought to set out a pan European framework for the operation of pension schemes and included mandatory requirements in key areas such as the funding of DB schemes and the investment of scheme assets. It was also intended to enable schemes located in one EU Member State to operate on a cross-border basis.

One of the main drivers for the European Commission’s proposals for IORP II was the 2008 financial crisis and the need to deal with the general perceived lack of governance and transparency. Set against the backdrop of individuals in some EU Member States seeing their pensions reduced, scheme

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