IPE: European Commission takes Poland to court over IORPs

17 June 2011

The European Commission has started legal proceedings against Poland for failing to comply with the IORP Directive, which applies to workplace-based pension schemes, by not implementing the Directive into national law. The case is to be referred to the European Court of Justice in Luxemburg.

The Commission has also called on Estonia to comply with EU rules concerning the same Directive, sending the country a "reasoned opinion" for failing to incorporate the Directive "fully and completely" into national law. Estonia has two months to take "satisfactory measures" or it too may find itself referred to the ECJ. The deadline for implementing the entire Directive goes back to September 2005.

The Commission said the failures to implement it meant common rules on pension funds were not being upheld at the same level across the EU. It argued that Polish and Estonian members and beneficiaries of occupational schemes "might not have the same level of protection, legal certainly and guarantees as elsewhere in the EU".

Most so-called 'infringement procedures', for failure to meet deadlines for implementing Directives, are resolved before referral to the court. In the instance of Poland however, the Commission's decision will be passed to its Legal Service to finalise the legal case.

At the court, proceedings begin with a hearing. Later, the Advocate General, the judge leading on the matter, will issue an 'opinion'. In most examples, the final decision of the court will follow his findings. The whole process can easily take two years. Since the enactment of the Lisbon Treaty, the Commission has been able to ask the ECJ to impose financial penalties, but in the case with Poland the Commission has not made the request.

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