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The Scope of the EU ‘Pensions’-Directive: Some Background and Solutions for Policymakers

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Social Services of General Interest in the EU

Part of the book series: Legal Issues of Services of General Interest ((LEGAL))

Abstract

Pensions are currently at the top of the agenda of companies, employees, pension providers, governments and, last but not least, the European Union. The European Commission is about to revise the most important EU-pension legislation, the Directive concerning the Institutions for Occupational Retirement Provisions (the IORP-Directive).The EU aims to further regulate the internal market for pension provision and review the scope of the Directive. But pensions were a matter for national competence and Member States carefully watch the steps of the EU for various reasons. The question on the scope of the IORP-Directive touches upon the essence of ‘pension.’ What are ‘pensions’? What kind of pension funds should be subject to the Directive? Should pensions be subject to internal market rules, or should it be a competence of national social partners, where the EU should have a little as possible influence? In this chapter solutions are offered for the dilemmas that are faced when regulating ‘pensions’ at the supra national level. On the basis of an analysis of the case law on EU Internal Market law and EU competition law lessons can be learned for redefining the scope of the Directive. Furthermore, this chapter will provide for some (legal) clarification and background on the highly complex world of ‘EU Pensions.’ The suggestions in this chapter might be useful for policymakers.

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Notes

  1. 1.

    See for an elaboration: Commission, Communication from the Commission to the European Parliament, the Council, the Economic and Social Committee and the Committee of the Regions, Dealing with the Impact of an Ageing Population in the EU, COM(2009) 180 final, 29 April 2009.

  2. 2.

    In the Netherlands, the Labour Foundation presented the concept Pension Accord Spring 2010 on 4 June 2010. This Accord proposes fundamental changes in occupational pensions in the second pillar. A year later the social partners presented the final Accord.

  3. 3.

    CJEU, Case C-67/96 Albany [1999] ECR I-5751.

  4. 4.

    CJEU, Case C-271/08 Commission v. Germany [decided on 15 July 2010, nyr].

  5. 5.

    See, for instance, CJEU, Case C-150/04 Commission v. Denmark [2007] ECR I-1163.

  6. 6.

    Directive 2003/41/EC of the European Parliament and of the Council of 3 June 2003 on the activities and supervision of institutions for occupational retirement provision, OJ L 235/10-21.

  7. 7.

    Commission, Green Paper, Towards Adequate, Sustainable and Safe European Pension Systems, COM (2010) 365 final, 7 July 2010.

  8. 8.

    Commission, Communication from the Commission to the European Parliament, the Council, the Economic and Social Committee and the Council of the Regions, Commission Work Programme 2010, Time to Act, COM(2010) 135 final, 31 March 2010.

  9. 9.

    For instance: women outlive men therefore should they still be treated equally?

  10. 10.

    This includes rising the retirement age, potentially rewarding late retirement and discouraging early retirement.

  11. 11.

    To quote the European Commission: ‘By demonstrating the interdependence of the various schemes and revealing weaknesses in some scheme designs the crisis has acted as a wake-up call for all pensions, whether PAYG or funded: higher unemployment, lower growth, higher national debt levels and financial market volatility have made it harder for all systems to deliver on pension promises’ Green Paper, op cit footnote 7, supra.

  12. 12.

    A website was launched especially for this purpose: ec.europa.eu/social/main.jsp?langId=en&catId=89&newsId=839&furtherNews=yes.

  13. 13.

    First, what quantitative requirements should apply to IORPs and how should these be measured. Second, what should be the qualitative requirements, particularly in respect of the governance of IORPs. Third, what information should be provided in respect of IORPs to members and beneficiaries, and to supervisory authorities. See: European Insurance and Occupational Pensions Authority (EIOPA)‘Draft response to Call for Advice on the review of Directive 2003/41/EC Scope, cross-border activity, prudential regulation and governance,’ EIOPA-CP-11/001, 8 July 2011.

  14. 14.

    The Dutch government writes in response to the Green Paper: ‘The Dutch parliament has expressly referred to the national competence regarding the establishment of the national pension system. The Dutch parliament has thereby indicated that the role of Europe in the field of pensions will remain under a critical review,’ supra, n. 12.

  15. 15.

    COM (2010) 365 final, op cit footnote 7 supra.

  16. 16.

    All manner of hybrid schemes are possible as well.

  17. 17.

    Op cit footnote 6 supra and accompanying text.

  18. 18.

    Council Regulation 1408/71 of 14 June 1971 on the application of social security schemes to employed persons, to self-employed persons and to members of their families moving within the Community, Consolidated version OJ 1997 L 28/1.

  19. 19.

    Regulation 883/2004 of the European Parliament and of the Council of 29 April 2004 on the coordination of social security systems, OJ 2004 L 166/1-123.

  20. 20.

    Council Regulation 574/72 of 21 March 1972 fixing the procedure for implementing Regulation (EEC) No 1408/71 on the application of social security schemes to employed persons and their families moving within the Community, OJ 1996 L 323/38.

  21. 21.

    Council Directive 85/611/EEC of 20 December 1985 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS), OJ 1985 L 375/3–18.

  22. 22.

    Council Directive 73/239/EEC of 24 July 1973 on the coordination of laws, regulations and administrative provisions relating to the taking up and pursuit of the business of direct insurance other than life assurance, OJ 1973 L 228/3-19.

  23. 23.

    Council Directive 93/22/EEC of 10 May 1993 on investment services in the securities field, OJ 1993 L 141/27-46.

  24. 24.

    Directive 2000/12/EC of the European Parliament and of the Council of 20 March 2000 relating to the taking up and pursuit of the business of credit institutions, OJ 2000 L 126/1-59.

  25. 25.

    The Insurance Directives have all been replaced by the Solvency II Directive: Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009 on the taking up and pursuit of the business of insurance and reinsurance (Solvency II), OJ L335/1, 1-155.

  26. 26.

    Op cit., footnote 19 supra.

  27. 27.

    Op cit., footnote 20 supra

  28. 28.

    Some Member States (e.g. France) have availed themselves of this option; others (including the Netherlands) have not (Dutch Parliamentary Documents II, 2004/05, 30 104, no. 3, p. 7). See also: Van Meerten and Starink 2011.

  29. 29.

    See Table 1 of the Commission working document accompanying the Green Paper, originally prepared by the OPC as part of its Report on pension institutions outside the statutorily managed first pillar, CEIOPS-OP-32-09 (fin), 30 October 2009.

  30. 30.

    Op cit footnote 18, supra.

  31. 31.

    Op cit footnote 20, supra.

  32. 32.

    Supra, n. 29.

  33. 33.

    We owe Barthold Kuipers (EIOPA) gratitude for his comments on this point.

  34. 34.

    Explanatory Memorandum’ of the Dutch PPI Act, Dutch Acts of Parliament, No. 31891, 3, 2008–2009.

  35. 35.

    See also Chap. 17 in this volume, by Schelkle and Van Meerten and Starink 2011.

  36. 36.

    Brussels, 15th of November 2010, AEIP’s reaction to the Green Paper, Towards adequate, sustainable and safe European pension systems, COM(2010) 365/3.

  37. 37.

    In Malta, the retirement Scheme of a contractual nature consists of a separate pool of assets with no legal personality with the purpose of providing retirement benefits. See: Legal form of the IORP, CEIOPS-DOC-08-06 Rev1, 30 October 2009.

  38. 38.

    Opinion on the legal basis of the proposal for a regulation of the European Parliament and of the Council on enforcement measures to correct excessive macroeconomic imbalances in the euro area, COM (2010) 525—C7-0299/2010– 2010/0279(COD), 12 April 2011.

  39. 39.

    Conclusions of the Heads of State or Government of the Euro area, Brussels, 11 March 2011. Available at: http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ec/119809.pdf.

  40. 40.

    CJEU, Case C-343/08 Commission v. Czech Republic [2010] ECR I-275.

  41. 41.

    Lenaerts 1990.

  42. 42.

    Van Meerten 2004.

  43. 43.

    Opinion of AG P Mengozzi of 11 November 2010 in CJEU, Case C-437/09 AG2R [decided on 3 March 2011, nyr], p. 41.

  44. 44.

    There is no general EU legislative framework applicable to SSGIs; hence, they are subject to the legal regime of SGIs. However, some EU-law imposes a different legal regime so SSGIs, such as exclusion from the area of application of Services Directive. Van Meerten et al. (2008).

  45. 45.

    Confirmed by the Commission: Commission, Commission Staff Working Document, Guide to the Application of the European Union Rules on State Aid, Public Procurement and the Internal Market to Services of General Economic Interest, and in Particular to Social Services of General Interest, SEC(2010) 1545, 7 December 2010.

  46. 46.

    CJEU, Joined Cases C-180-184/98 Pavlov [2000] ECR I-6451.

  47. 47.

    European Commission (EC) ‘Services of general interest, including social services of general interest: a new European commitment,’ COM(2007) 725 final.

  48. 48.

    Ibid.

  49. 49.

    CJEU, Case C-82/01 Aéroports de Paris [2002] ECR I-9297.

  50. 50.

    CJEU, Case C-222/04 Cassa di Risparmio di Firenze [2006] ECR I-289.

  51. 51.

    CJEU, Case 118/85 Commission v. Italy [1987] ECR 2599.

  52. 52.

    CJEU, Joined Cases C-264/01, C-306/01, C-354/01 and C-355/01 AOK Bundesverband [2004] ECR I-2493.

  53. 53.

    CJEU, Case C-437/09 AG2R [decided on 3 March 2011, nyr].

  54. 54.

    See, inter alia, CJEU, Case C-350/07 Kattner Stahlbau [2009] ECR I-1513.

  55. 55.

    As Drijber rightly argued, this reasoning of the CJEU in Albany is rather odd. First the CJEU held that granting an exclusive right is not as such contrary to Article 86 EC [now Article 106 TFEU] in conjunction with Article 82 EC [now Article 102 TFEU] but then held that the exclusive right to its very nature restricts competition, which requires justification. See (in Dutch): Drijber 2007.

  56. 56.

    CJEU, Case C-67/96 Albany [1999] ECR I-5751.

  57. 57.

    European Association of Paritarian Institutions (AEIP), ‘Reflection Paper on Solidarity in Social Protection,’ June 2005. Available at: www.aiep.net.

  58. 58.

    CJEU, Case C-350/07 Kattner Stahlbau [2009] ECR I-1513.

  59. 59.

    CJEU, Case C-437/09 AG2R [decided on 3 March 2011, nyr].

  60. 60.

    Supra, n. 2.

  61. 61.

    See Article of Kocken and Van Wijnbergen in the Dutch Financial Times, 29 July 2011, ‘Fatal Error in Pension Accord.’

  62. 62.

    CJEU, Case C-244/94 Fédération française des sociétés d’assurance and Others [1995] ECR I-4013.

  63. 63.

    SEC(2010) 1545 final, op cit footnote 45, supra.

  64. 64.

    CJEU, Case C-159/94 Commission v. France [1997] ECR I-5815.

  65. 65.

    Van de Gronden and Sauter 2011.

  66. 66.

    See for the healthcare situation: Van de Gronden 2009.

  67. 67.

    Note that in healthcare case the universal coverage is of interest as well since providing access to all may be regarded as an expression of solidarity, as the CJEU did in the FENIN case, CJEU, Case C-205/03 P FENIN v. Commission [2006] ECR I-6295.

  68. 68.

    CJEU, Case C-355/00 Freskot [2003] ECR I-5263.

  69. 69.

    CJEU, Case C-350/07 Kattner Stahlbau [2009] ECR I-1513.

  70. 70.

    See Chap. 6 in this volume, by van de Gronden.

  71. 71.

    See also Szyszczak 2009.

  72. 72.

    Opinion of AG Bot of 6 October 2009 in CJEU, Case C-343/08 Commission v. Czech Republic [2010] ECR I-275, p. 56. See, in particular, CJEU, Case C-303/02 Haackert [2004] ECR I-2195.

  73. 73.

    CJEU, Case C-67/96 Albany [1999] ECR I-5751.

  74. 74.

    Supra, n. 65.

  75. 75.

    Clark and Bennett 2001.

  76. 76.

    Ibid.

  77. 77.

    Supra, n. 12.

  78. 78.

    Antworten der Bundesregierung auf die im Grünbuch enthaltenen Fragen der EU-Kommission—finale Fassung, Supra, n. 12. Author’s translation: ‘The Commission's approach to widen the scope of the IORP Directive, in order to strengthen the internal market for pension products could thus not be achieved. ‘Book reserve schemes’ are not financial products, but are about company intern social services, which are protected against loss in Germany by the Pension Protection Association. If one were to bring these services in accordance with regulatory requirements of the IORP Directive, for example in relation to the coverage of assets, that would be tantamount to the abolition.’

  79. 79.

    www.hollandfinancialcentre.nl

  80. 80.

    Article 20 IORP Directive.

  81. 81.

    European Association of Paritarian Institutions (AEIP), ‘AEIP’s reaction to the Green Paper,’ November 2010, Supra, n.12.

  82. 82.

    It remains uncertain under the IORP Directive when a fund is cross borderly active. Under the Dutch approach the difference between the location of establishment of the sponsoring undertaking and the location of the IORP is not decisive to determine the possible cross-border activity. What should decisive is the difference between the ‘nationality’ of the pension scheme and the location of the IORP. See: Van Meerten 2009.

  83. 83.

    In principle, because in practice a cross border element can easily be found.

  84. 84.

    Article 304 of the Solvency II Directive, stipulates: ‘the activities of the undertaking related to points (a) and (b), in relation to which the approach referred to in this paragraph is applied, are pursued only in the Member State where the undertaking has been authorized.’

  85. 85.

    With four levels of legislation. This method was introduced on the basis of the recommendations of the ‘Lamfalussy Report’ and accepted by the European Council: Resolution of 23 March 2001 on more effective securities market regulation in the European Union, OJ 2001 C 138/1/2. See for more detail: Ottow and Van Meerten 2010.

  86. 86.

    Lechkar et al. 2009.

  87. 87.

    For DC-type plans the same information should be provided as for DB plans, except information on the funding level for those DC-type plans where the members take the risk. See in this respect also: De Ryck 1999, p. 50.

  88. 88.

    See for an interesting approach: Pikaart and Bos 2011.

  89. 89.

    Minimum Capital Requirement and Solvency Capital Requirement.

  90. 90.

    In case the fund operates DB schemes.

  91. 91.

    See Article 30 of the Solvency II Directive. Article 30(1 and 2) reads: ‘the financial supervision of insurance and reinsurance undertakings, including that of the business they pursue either through branches or under the freedom to provide services, shall be the sole responsibility of the home Member State. Financial supervision pursuant to para 1 shall include verification, with respect to the entire business of the insurance and reinsurance undertaking, of its state of solvency, of the establishment of technical provisions, of its assets and of the eligible own funds, in accordance with the rules laid down or practices followed in the home Member State under provisions adopted at Community level.’

  92. 92.

    See recital 16 of the Solvency II Directive.

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  1. Clifford Chance LLP, Amsterdam, The Netherlands

    Hans van Meerten

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  1. Hans van Meerten
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Correspondence to Hans van Meerten .

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Editors and Affiliations

  1. , Faculty of Law, University of Copenhagen, Studiestræde 6, Copenhagen K, 1455, Denmark

    Ulla Neergaard

  2. , School of Law, University of Leicester, University Road, Leicester, LE1 7RH, United Kingdom

    Erika Szyszczak

  3. , Faculty of Law, Radboud University, Comeniuslaan 4, Nijmegen, 6525 HP, Netherlands

    Johan Willem van de Gronden

  4. , Fachbereich Rechtswissenschaft, Universität Erlangen-Nürnberg, Schillerstraße 1, Erlangen, 91054, Germany

    Markus Krajewski

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van Meerten, H. (2013). The Scope of the EU ‘Pensions’-Directive: Some Background and Solutions for Policymakers. In: Neergaard, U., Szyszczak, E., van de Gronden, J., Krajewski, M. (eds) Social Services of General Interest in the EU. Legal Issues of Services of General Interest. T.M.C. Asser Press, The Hague, The Netherlands. https://doi.org/10.1007/978-90-6704-876-7_16

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