Workplace pension rules: MEPs adopt their position on IORP II update

Economic and monetary affairs MEPs on Tuesday adopted their position on improving rules on workplace pensions.

The text containing the changes MEPs wish to see to the Commission proposal was adopted with 33 votes in favour, 18 against, and 3 abstentions. Since member states have also adopted their position, negotiations between the European Parliament and the member states are expected to begin shortly.

Lighter regime, more protection

MEPs are seeking to apply a lighter regime for new institutions for occupational retirement provision (IORPs) for the first three years of operation. They also want that risk assessment requirements, including in relation to climate-related financial risks, should remain proportionate to the nature, scale and complexity of the IORP concerned.

This does not mean however lessened protection. For example, MEPs say that where IORPs are authorised to provide personal pension products (PEPs), Member States shall ensure that the interests of members and beneficiaries are safeguarded. IORPs shall not use information obtained through operating pension schemes for the marketing, distribution or cross-selling of personal pension products.

Better information

MEPs also want to improve the information members and beneficiaries receive. This information should be simple, clear and understandable for members and beneficiaries to support their informed decision-making.

Notably, members of pension schemes should be provided with adequate information regarding the consequences to their pension benefits of any interruptions to, or changes in the amount of, contributions paid into the pension scheme in those circumstances. Also, the presentation of the Pension Benefit Statement should enable members and beneficiaries to understand and compare their entitlements across schemes and borders.

IORPs should also be subject to minimum plain language disclosure requirements for the pre-retirement phase. Such disclosures should cover the main features, risks, including factors that could adversely affect the level, stability and duration of the retirement income, and suitability considerations of each pay-out, including for variable annuities.

Finally, workers who change jobs and move between Member States, should have a Statement which enables them to understand and compare their entitlements across schemes and borders.

Increasing uptake of workplace pensions

MEPs say that Member States may facilitate that at least one IORP which operates in their territory accepts sponsorship from undertakings of any type and from self-employed persons not subject to mandatory membership in a pension scheme under national law, under simple, standardised, objective, transparent and non-discriminatory conditions.

Rapporteur quote

Damian Boeselager (Greens/EFA, DE) said, “More flexible and ambitious rules for investment in innovation, including into venture capital allocation was our way of delivering on the Draghi recommendation of unlocking billions for innovation. Pension funds can help strengthen our competitiveness whilst generating better returns for members and beneficiaries that will help to improve life after work. This approach has already proved itself in other places of the world. The report we adopted today partly achieves this: Europe’s pension funds are no longer structurally locked out of financing Europe’s own, innovative growth — and that is exactly what this compromise delivers.

“Beyond investment, members and beneficiaries get pension tracking systems that show them their full retirement picture, and a benefit statement that is finally honest about costs, performance and what their pension will really be worth. We also cut red tape rather than adding it: lighter stress testing, real administrative relief for small and newly established pension funds, and the deletion of several layers of bureaucracy which the original proposal would have created.

“We now need to defend this level of ambition in the negotiations with member states. On investment freedom and on transparency, the Council’s position falls well short of what European savers and European companies need.”

Further information

After the vote, the committee MEPs gave the green light to Parliament’s negotiating team to begin discussions with the member states. This mandate was given with 40 votes in favour, 11 against and 3 abstentions.

This legislation is part of a package of measures proposed in November 2025 to help citizens secure adequate income in retirement by improving access to better and more effective supplementary pensions. At the same time, it also sets out to better leverage pension schemes to ensure they contribute more to Europe's economic growth and competitiveness by mobilising long-term savings for productive investments.