Institutions for Occupational Retirement Provision II: Challenges and Opportunities

Institutions for Occupational Retirement Provision II: Challenges and Opportunities

January 2019

By Pieter Strik and Marvin Vervaart

The new version of the EU directive on Institutions for Occupational Retirement Provision (IORP) is set to have a profound impact on workplace pensions. BNY Mellon’s new report looks at the challenges and opportunities it presents for European pension funds.

IORP II reflects European regulators’ desire to create a stable, efficient and effective pension environment. It aims to enhance pension schemes’ governance, risk management and communications. The directive seeks to remove barriers to cross-border pension provision. It also places new emphasis on ESG-related risks.

“For companies with pension schemes in multiple countries in the EU, IORP II presents potential cross-border opportunities.”

— Pieter Strik, Product Manager, BNY Mellon

EU member states had until 13 January 2019 to transpose IORP II into national law. While the degree of change will vary by country, schemes across Europe ought to familiarise themselves with the directive to ensure a smooth transition to key requirements.


BNY Mellon’s new report, IORP II: Challenges and Opportunites, addresses:

  • The origins and implications of IORP II: EU pension law and IORP II specialist, Hans Van Meerten, provides insight into the origins of the directive, why it was brought into force and whether it is likely to meet its intended objectives. Differences in the way it’s being legislated may undermine its goals. 

“It is important to understand that IORP II is a directive and not a regulation. A directive must be legislated by each member state and therefore approaches may be taken that undermine its original objectives.”

— Hans Van Meerten, Member, EOPIA, Occupational Pensions Stakeholder Group

  • What the directive seeks to achieve: At 67 articles, compared to the 24 of its predecessor, IORP II is wide-reaching. Key goals of the directive include enhanced governance and risk management, promotion of cross-border pension activities and a greater focus on ESG investing. 
  • How pension funds can make the most of IORP II: BNY Mellon provides solutions to help schemes overcome the challenges and harness the opportunities IORP II presents, including capabilities to help schemes gain risk management insights, meet ESG requirements and support the administration of multiple plans.  


Ambitious and wide-reaching, IORP II is likely to herald further changes for the European pension industry. With BNY Mellon’s support, schemes will be well-placed to achieve their strategic goals as the European pension landscape continues to shift.


BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation and may be used as a generic term to reference the corporation as a whole and/or its various subsidiaries generally. This material and any products and services may be issued or provided under various brand names in various countries by duly authorised and regulated subsidiaries, affiliates, and joint ventures of BNY Mellon, which may include any of the following. The Bank of New York Mellon, at 240 Greenwich Street, NY, NY 10286 USA, a banking corporation organised pursuant to the laws of the State of New York, and operating in England through its branch at One Canada Square, London E14 5AL, registered in England and Wales with numbers FC005522 and BR000818. The Bank of New York Mellon is supervised and regulated by the New York State Department of Financial Services and the US Federal Reserve and authorised by the Prudential Regulation Authority. The Bank of New York Mellon, London Branch is subject to regulation by the Financial Conduct Authority and limited regulation by the Prudential Regulation Authority. Details about the extent of our regulation by the Prudential Regulation Authority are available from us on request. The Bank of New York Mellon SA/NV, a Belgian public limited liability company, with company number 0806.743.159, whose registered office is at 46 Rue Montoyerstraat, B-1000 Brussels, authorised and regulated as a significant credit institution by the European Central Bank (ECB), under the prudential supervision of the National Bank of Belgium (NBB) and under the supervision of the Belgian Financial Services and Markets Authority (FSMA) for conduct of business rules, a subsidiary of The Bank of New York Mellon, and operating in England through its branch at 160 Queen Victoria Street, London EC4V 4LA, registered in England and Wales with numbers FC029379 and BR014361. The Bank of New York Mellon SA/NV (London Branch) is authorised by the ECB and subject to limited regulation by the Financial Conduct Authority and the Prudential Regulation Authority. Details about the extent of our regulation by the Financial Conduct Authority and Prudential Regulation Authority are available from us on request. The Bank of New York Mellon SA/NV, operating in Ireland through its branch at Riverside 2, Sir John Rogerson’s Quay, Grand Canal Dock, Dublin 2, D02 KV60, Ireland, trading as The Bank of New York Mellon SA/NV, Dublin Branch, which is authorized by the ECB, regulated by the Central Bank of Ireland for conduct of business rules and registered with the Companies Registration Office in Ireland No. 907126 & with VAT No. IE 9578054E. If this material is distributed in or from, the Dubai International Financial Centre (DIFC), it is communicated by The Bank of New York Mellon, DIFC Branch, (the “DIFC Branch”) on behalf of BNY Mellon (as defined above). This material is intended for Professional Clients and Market Counterparties only and no other person should act upon it. The DIFC Branch is regulated by the DFSA and is located at DIFC, The Exchange Building 5 North, Level 6, Room 601, P.O. Box 506723, Dubai, UAE. BNY Mellon also includes The Bank of New York Mellon which has various subsidiaries, affiliates, branches and representative offices in the Asia-Pacific Region which are subject to regulation by the relevant local regulator in that jurisdiction. Details about the extent of our regulation and applicable regulators in the Asia-Pacific Region are available from us on request. Not all products and services are offered in all countries.

The material contained in this document, which may be considered advertising, is for general information and reference purposes only and is not intended to provide legal, tax, accounting, investment, financial or other professional advice on any matter, and is not to be used as such. The contents may not be comprehensive or up-to-date, and BNY Mellon will not be responsible for updating any information contained within this document. If distributed in the UK or EMEA, this document is a financial promotion. This document and the statements contained herein, are not an offer or solicitation to buy or sell any products (including financial products) or services or to participate in any particular strategy mentioned and should not be construed as such. This document is not intended for distribution to, or use by, any person or entity in any jurisdiction or country in which such distribution or use would be contrary to local law or regulation. Similarly, this document may not be distributed or used for the purpose of offers or solicitations in any jurisdiction or in any circumstances in which such offers or solicitations are unlawful or not authorised, or where there would be, by virtue of such distribution, new or additional registration requirements. Persons into whose possession this document comes are required to inform themselves about and to observe any restrictions that apply to the distribution of this document in their jurisdiction. The information contained in this document is for use by wholesale clients only and is not to be relied upon by retail clients. Trademarks, service marks and logos belong to their respective owners.
 

BNY Mellon assumes no liability whatsoever for any action taken in reliance on the information contained in this material, or for direct or indirect damages or losses resulting from use of this material, its content, or services. Any unauthorised use of material contained herein is at the user’s own risk. Reproduction, distribution, republication and retransmission of material contained herein is prohibited without the prior consent of BNY Mellon.
 

© 2019 The Bank of New York Mellon Corporation. All rights reserved.

Ready to grow

your business?

Speak to our team.

Ready to grow your business? Speak to our team.