Date: 26th May 2023

EIOPA consulted on the review of IORP II Directive, which governs occupational pension schemes in the EU. BETTER FINANCE's response to the consultation focuses on protecting the interests of pension scheme participants.

BETTER FINANCE proposes changing the terms "beneficiaries" and "members" to "participants" to accurately reflect the stakeholders involved. BETTER FINANCE also highlights the lack of supervision for some pension providers in the EU, citing the imminent bankruptcy of the European Parliament's supplementary pension fund as a concerning example. BETTER FINANCE calls for a thorough review of the IORP II Directive to ensure that all occupational pension schemes, including those provided by public authorities, are included within its scope.

BETTER FINANCE emphasises the need for cautious exemptions for "low-risk profile" pension schemes and supports allowing pension providers to invest outside the EU, provided there is a robust equivalence mechanism to safeguard investor protection. BETTER FINANCE advocate granting supervisors the power to request quantitative information from pension schemes regularly to enhance transparency and facilitate effective supervision.

BETTER FINANCE also raises the issue of prolonged underperformance in pension schemes, which poses a significant risk to participants' pension rights, and suggests extending the purview of supervision to include conduct of business.

BETTER FINANCE stresses the importance of clear, transparent, comprehensive, and comparable information provided by pension schemes to their members and prospective members through documents like the Pension Benefit Statement and pre-contractual documentation. BETTER FINANCE highlights the shift from defined-benefit to defined-contribution pension schemes and argues for additional requirements, such as long-term risk assessment and reporting of cost and performance information, to align investment decisions with participants' long-term goals and enable sponsors and participants to assess the affordability and value of pension schemes managed by institutions for occupational retirement provisions (IORPs).