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European Pensions Directives 2003/41/EC and (EU) 2016/2341


Published: 25 February 2019

The European Pensions Directive 2016/2341/EU contains rules that apply to almost all pension institutions in Europe, regardless of their name, form or legal status. This Directive specifies among other things that pension institutions can operate pension schemes of employers from other Member States. This Directive also includes an obligation to establish key functions and sets additional requirements with regard to risk management. This Directive replaces an earlier Directive from 2003 (2003/41/EC).

As in the case of the previous Directive, this Directive contains rules on pension institutions’ cross-border operations. For example, in terms of prudential supervision, the regulations of the pension institution's home country apply, even if the institution operates a pension scheme from another Member State. However, the tax, social security and labour law of the employees’ country of employment continues to apply to the pension scheme outsourced to another Member State.

The investment regulations of pension institutions are subject to the prudent person rule, which means that the pension institution is required to act in the same way as a careful, sensible and prudent asset manager would act in similar circumstances. This is an open standard, and various Member States apply different interpretations. The Netherlands predominantly sets qualitative standards. These are detailed in the Financial Assessment Framework (Financieel Toetsingskader – FTK).

Directive 2016/2341/EU introduces new rules strengthening the governance of pension institutions, further specifies the procedure for cross-border value transfers and prescribes additional disclosure requirements.


The strengthening of the governance concerns the requirement of integrated risk management, the introduction of key functions for risk management, actuarial duties and internal audit (i.e. clear separation between implementation and supervision of implementation) and the addition of a compulsory own-risk assessment to be carried out at least every three years.

Cross-border value transfers

The further specification of the process of cross-border value transfers serves to strengthen the rights of employees. For example, the Directive introduces criteria against which DNB can assess – and if necessary block – group value transfers from a Dutch pension scheme to a pension institution in another Member State.

Additional disclosure requirements

The Directive also introduces additional disclosure requirements stipulating that a pension institution’s remuneration policy, any sanctions imposed by the supervisory authority and any notifications to the supervisory authority regarding outsourced activities or serious malpractices must be publicly disclosed. This Directive was implemented in Dutch law and regulations on 13 January 2019.

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