PensionsEurope promotes good pensions for the people of Europe

IORP II Directive

PensionsEurope shares the goal of the so-called IORP II Directive to facilitate the development of occupational retirement savings and to provide sustainable and adequate occupational pensions to the European citizens.

The IORP II Directive sets common standards ensuring the soundness of occupational pensions and better protects pension scheme members and beneficiaries, by means of among others: (i) new governance requirements, (ii) new rules on IORPs’ own risk assessment, (iii) new requirements to use a depositary, and (iv) enhanced powers for supervisors.

The final text of the IORP II Directive was published in the Official Journal of the European Union on 23 December 2016. You can find the text and all language versions of the IORP II Directive here (and the original IORP Directive here).

The new rules entered into force on 12 January 2017 and according to the Article 66 of the IORP II Directive Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with the Directive by 24 months after its entry into force (in other words by 13 January 2019).

PensionsEurope shares the best practices on the implementation of the IORP II Directive and you can read our further remarks about the IORP II Directive here.


PensionsEurope stresses that risk management is essential for pension funds and they regularly carry out their own stress tests and scenario analyses (e.g. Asset and Liability Management studies) as part of their own risk management processes.

The specifications and methodologies of national stress tests differ significantly from the ‘Common Methodology’ (Holistic Balance Sheet (HBS)) used in EIOPA’s stress test. The EIOPA stress test is more about testing the resilience of the sector (per country), rather than individual funds, and stability of the financial system as a whole. These outcomes can lead to different and contradictory steering signals for pension funds and for their stakeholders. As a consequence, they can also cause misunderstanding amongst the stakeholders and general public.

The IORP II Directive stresses that the further development at the EU level of solvency models, such as the HBS, is not realistic in practical terms and not effective in terms of costs and benefits, particularly given the diversity of IORPs within and across Member States. No quantitative capital requirements - such as Solvency II or HBS models derived therefrom - should therefore be developed at the EU level with regard to IORPs, as they could potentially decrease the willingness of employers to provide occupational pension schemes. PensionsEurope calls for policymakers and EIOPA to respect this.