The IORP II review: from regulatory change to strategic advantage 

The most common underestimation with EU regulation is timing. The policy signal arrives early; the operational impact lands later, through national transposition and supervisory practice. That delay can create false comfort. But once local rules are in force, the burden will not be theoretical: boards and fiduciaries will need to evidence to their members and to regulators how decisions are made, monitored and improved. 

What makes preparation harder, and therefore more valuable, is that implementation will not be uniform. Member States can translate the same intent into different degrees of prescription, differing supervisory intensity, and varying interpretations of where pensions-specific requirements end and cross-sector obligations begin. 

The strategic imperative goes beyond compliance: avoid spending your risk budget on avoidable complexity. Organisations that prepare early will be able to: 

• design a proportionate operating model rather than layering controls reactively; 
• protect member outcomes from being eroded by unplanned compliance cost; 
• maintain strategic flexibility in investment, operations and governance choices. 

In long-term savings, late compliance is rarely neutral – it tends to be expensive, distracting, and value-destructive. 

Regulation succeeds when it improves outcomes without driving perverse incentives. That is particularly important in pensions, where simplified metrics can produce simplified behaviour. 

Our engagement with policymakers is grounded in a clear point of view: Europe needs stronger occupational pension systems, but not at the price of fragmentation or box-ticking that diverts resources from member value. In practice, this means advocating for three design principles. 

• First: proportionality that reflects the reality of diverse schemes. 

    Size alone is a blunt proxy. Maturity, closure status, and the availability of practical pathways to adapt (consolidate, restructure, exit) matter just as much. Without that nuance, well-intended requirements can create high cost with limited marginal benefit – especially for legacy arrangements. 

• Second: transparency that enables decisions, not headlines. 

    Cost and value-for-money are legitimate priorities – but the policy objective should be understanding, not league tables. If the system rewards the lowest headline cost regardless of net outcomes, it risks pushing fiduciaries towards strategies that look cheaper but are not necessarily better for members over the long term. 

• Third: accountability that avoids short-termism. 

    If “underperformance” is defined too narrowly, or the scope of its application is limited to the underlying building blocks of an IORP rather than including the strategic allocation framework by which these building blocks are assembled, it can encourage herding and overly conservative positioning, outcomes that may reduce resilience exactly when long-horizon investing is needed. Accountability should reinforce long-term objectives, not compress them. 

This is why engagement matters: the difference between good and bad regulation often sits in definitions, thresholds, and how proportionality is operationalised. 

If the IORP II review signals anything, it is that regulators increasingly expect institutions to demonstrate good governance – not merely to declare it. That expectation raises the bar on evidence, oversight, and operational resilience. 

At Marsh, we help clients move from interpretation to execution – without defaulting to “more process”. The focus is on practical readiness that protects member value while meeting rising supervisory expectations. Typical support includes: 

• Regulatory impact and readiness diagnostics across jurisdictions: what is likely to change, where the pressure points will land, and what needs lead time (data, reporting, governance cadence, third-party oversight). 
• Proportionate governance design: clarifying accountabilities, strengthening controls, and improving documentation in a way that is defensible and efficient. 
• Disclosure and stakeholder narrative: making transparency decision-useful—connecting costs, risks, strategy and outcomes in plain language that holds up to scrutiny. 
• Implementation roadmaps: sequencing work so action is taken early where it is low-regret, while preserving flexibility for national specifics.
• Bringing the bigger picture: because our systems are in transition, and because IORPs are increasingly being touched by horizontal regulation – for example under headings such as stewardship, data protection and cyber resilience – identifying cost-effective and future-proofed solutions.