The internal market for supplementary pensions: A long and winding road
| DOI | http://doi.org/10.1177/1023263X221096027 |
| Published date | 01 June 2022 |
| Date | 01 June 2022 |
| Subject Matter | Articles |
The internal market for
supplementary pensions:
A long and winding road
Joris Gruyters *
Abstract
Since the beginning of the 1990s, EU initiatives have sought to gradually harmonize the activities of
institutions for retirement provisions (‘IORPs’). However, thirty years later, multiple barriers to
entry remain. This article will identify the current state of play, by adopting a twofold approach
towards supplementary pensions in a context of EU internal market law. First, we will assess
the process of negative integration of several pension policy tools in light of the free movement
case law (in particular, the free provision of services). During this study, the focus will be on
mechanisms of compulsory membership and collective bargaining in the field of occupational pen-
sions. Second, we will analyse the most important legislative constraints of supplementary pension
services at EU level, with an emphasis on secondary internal market law. We argue that, despite
the effort of respecting national autonomy in social policy, positive integration has led to several
spillovers. Finally, the article will highlight the most significant obstacles, and conclude by discussing
the general attitude of EU internal market law towards supplementary pensions and social policy
in general.
Keywords
Social policy, EU internal market law, negative integration, supplementary pensions
1. Introduction
Pensions, be it State pensions or supplementary pensions, are often thought of as a separate field of
policy and governance. However, its subject matter cuts across various domains of law. Amongst
others, it involves tax law, social security law, financial law, EU competition law and even
*
PhD Researcher, Institute for Consumer Competition Market, KU Leuven Faculty of Law & Criminology, tiensestraat 41
3000 Leuven, Belgium
Corresponding author:
Joris Gruyters, KU Leuven Faculty of Law & Criminology, tiensestraat 41 3000 Leuven, Belgium.
E-mail: joris.gruyters@kuleuven.be
Article
Maastricht Journal of European and
Comparative Law
2022, Vol. 29(3) 375–398
© The Author(s) 2022
Article reuse guidelines:
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DOI: 10.1177/1023263X221096027
maastrichtjournal.sagepub.com
consumer protection.
1
As the development of pension rights is multi-layered, both States and
private entities have an important role to play in this process. An important legal perspective is
the free provision of services, a field of law that involves both State conduct and the entry of under-
takings in the internal market.
2
The interaction of EU internal market law and pension policies is a lengthy process with varying
degrees of success. This article critically analyses the constraints of EU internal market law, specif-
ically the law on the free provision of services, for supplementary pension policies.
In a first part, this article will study the assessment of supplementary pension policies in the case law
of the European Court of Justice (‘ECJ’) on EU internal market law. In doing so, the text will elaborate
on the evolution of negative integration. The analysis will focus on two policy aspects of su pplemen-
tary pensions: compulsory membership and collective bargaining. Both mechanisms will be studied
from a perspective of EU primary law, specifically the relevant articles on the freedom of establishment
and the freedom to provide services, enshrined in Articles 49 and 56 to 62 of the Treaty on the
Functioning of the European Union (‘TFEU’). By focusing on two specific policies in supplementary
pensions (compulsory membership and collective bargaining), the aim is to come to determined con-
clusions on the true significance of primary internal market law for supplementary pensions. We will
argue that the integrative nature of EU internal market law –as a processthat gradually removes obsta-
cles to the economic freedoms –is confronted to certain limits, both in fact and in law.
3
Second, this article will highlight the evolution of ECJ case law with regard to taxation of
pension providers and the development of supplementary pension plans. From the analysis, we con-
clude that the application of primary EU internal market law in the field of pension taxation has not
met the expectations of the early 2000s. As such, taxation is an adequate example in the search for
the limits of EU internal market law.
In a third part, initiatives of positive integration will be carefully scrutinized and linked to the
state of play identified in the foregoing sections. As this article emphasizes the effect of the free
provision of services, the Directives on the activities and supervision of institutions for occupational
retirement provision (‘IORP I
4
and II
5
’) will be studied, in particular in light of their role as second-
ary internal market rules and considering their purpose of enhancing cross-border pension provi-
sion. Other more specific legislative instruments, such as Solvency II
6
and the Supplementary
Pension Rights Directive,
7
will not be developed in this text. This part will allow us to conclude
on the current state of positive integration in supplementary pensions.
1. T. Hazell, ‘Do Consumers Need Protection from Pension Firms?’(2015) Financial Adviser ProQuest Central,
1700153564.
2. U. Neergaard, ‘The Concept of SSGI and the Asymmetries Between Free Movement and Competition Law’,in
U. Neergaard et al. (eds.), Social Services of General Interest in the EU (TMC Asser Press, 2013).
3. More on the distinction of negative and positive integration of social policy and the economic freedoms: S. Giubboni
(ed.), ‘Social Policies and Market Principles –European Social Integration Revisited’,inSocial Rights and Market
Freedom in the European Constitution: A Labour Law Perspective (Cambridge Studies in European Law and Policy,
Cambridge University Press, 2006).
4. Directive 2003/41/EC of the European Parliament and of the Council of 3 June 2003 on the activitiesand supervision of
institutions for occupational retirement provision [2003] OJ L 235/10.
5. Directive (EU) 2016/2341 of the European Parliament and of the Council of 14 December 2016 on the activities and
supervision of institutions for occupational retirement provision (IORPs) [2016] OJ L 354/37.
6. Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009 on the taking-up and
pursuit of the business of Insurance and Reinsurance [2009] OJ L 335/1.
7. Council Directive 98/49/EC of 29 June 1998 on safeguarding the supplementary pension rights of employed and self-
employed persons moving within the Community [1998] OJ L 209/46.
376 Maastricht Journal of European and Comparative Law 29(3)
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