Brussels, 12/09/2007 (Agence Europe) - Directive 2003/41/EC on the activities and monitoring of Institutions of Occupational Retirement Provision (IORP) allows these institutions to offer their services throughout the EU. Under the terms of the directive, pension funds, in cases of trans-national provision, are required to abide by the social legislation of the host country. Very often, however, this social legislation is not clear. This poses a problem. To bring some clarity to the situation, the European Association of Paritarian Institutions (AEIP) has published a report, “The development of a legal matrix on the meaning of national social and labour law in the Directive 2003/41/EC with regard to five member states”, carried out by Professor Yves Stevens of the Catholic University of Leuven (KUL). The aim of the report was to find common denominators and differences in national social and labour law as applied to IORPs of Belgium, France, Germany, Italy and the Netherlands.
Basing his work on the six pillars (set out by the Court of Justice in its rulings on social protection regimes, the AEIP points out) of protection and the level of protection, responsibility, security of existence, solidarity, equality and participation, Prof. Stevens compared the social and labour legislation of each of the above-mentioned countries. The six pillars are, the AEIP says, common criteria used to make comparisons of the level of social legislation in all EU countries in each of the areas (for example, there is strong solidarity in the Netherlands, unlike in Italy).
Recurrent common denominators in the five member states examined are: (1) IORPs are recognised as being suitable for pursuing public interest objectives; (2) social partners have a role in organising the relation between members and the IORP; (3) the protection of rights within the organisations of the pension scheme. The AEIP highlights that IORPs are deemed to be private institutions with considerable financial means. But finance is not everything, there are also social purposes. In the countries covered by the report, the social partners are always involved in the management of these funds, either through their representatives on the governing board or because they themselves make up a pension fund. Management, then, is not simply private (banks, insurance companies) there is also a social component.
The findings of the Stevens report were: (1) member states have taken a rather defensive approach on the issue of social and labour law; (2) from a strictly legal point of view, IORPs are considered financial pension vehicles; (3) fiscal and prudential law could undermine the principles of labour and social law. On the basis of these findings, Prof. Stevens sees a danger that the social aspect of occupational pensions could be lost. In order to ensure that occupational pensions are not considered purely as financial vehicles, a link has to be found at European level between financial and social policy with regard to retirement provision. The role of the social partners and governments is to establish minimum social standards applicable to occupational pensions. Existing divisions between public and private responsibility for old age security need to be redefined. In conclusion, the AEIP calls for transparency with regard to social and labour legislation and for the need to provide public access to the national social and labour legislation of the member states. The report (in English only) is available on: http://www.aeip.net (gb)