Invest Europe

Pension funds / IORP

Key policy areas

22 Dec 2025

The Institutions for Occupational Retirement Provision Directive (IORP II) establishes an EU regulatory framework for the pensions sector. Contrary to Solvency II for insurers and CRD/CRR for banks, the current Directive follows a non-risk based approach to the regulatory requirements for pension funds. However, it clarifies that investments in all alternative asset classes may not exceed 30% of the total assets of the IORP.

Tags:

Policy IORP Key policy areas

It is therefore left to Member States to apply more or less strict capital requirements to their pension funds - leading to wide variations between Member States.

The European Commission has recently launched a proposal revising IORPs to enhance the ability of pension funds to commit capital to the asset class. For the first time, the proposal recognises that investments in private equity can be part of a prudent investment allocation.

How does it affect private equity?

With pension funds providing more than a quarter of the investment into European private equity, any reform to their capital requirements would have an impact on Invest Europe members and could either improve or deter investments into private equity.