There will shortly be an amendment to the Law of 27 October 2006 relating to the supervision of institutions for occupational retirement provision (abbreviated to IORPs or referred to as 'pension funds'). This change to the legislation is a result of the implementation of the IORP II Directive of 14 December 2016. The proposed law was approved on 20 December 2018 by the Parliament. We will give you an overview of the most significant changes.
The proposed law provides a procedure for cross-border transfers.
The new legislation provides for four key roles that need to be covered by a pension fund:
- The risk management role (new role)
- An actuarial role (not necessary if the pension fund only manages fixed contribution plans)
- A compliance role
- An internal audit role
The risk management role is new and its importance should not be underestimated. The new legislation devotes the necessary attention to the risk management system, and pension funds are required to carry out their own risk assessment at regular intervals.
The new draft law imposes additional information requirements. All existing pension funds will need to review their current information and communication policies and make any necessary adjustments to meet the new requirements.
The legislator has provided transitional rules for existing pension funds, who need to appoint someone to the risk management role by 31 December 2019. Existing appointees in key roles may continue in place until 31 December 2020. After that, those responsible will need to be reappointed, or new managers must be designated in line with the prescribed procedures.