L 235/10 Official Journal of the European Union 23.9.2003 DIRECTIVE 2003/41/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 3 June 2003 on the activities and supervision of institutions for occupational retirement provision THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty establishing the European Community, and in particular Article 47(2), Article 55 and Article 95(1) thereof, Having regard to the proposal from the Commission ('), Having regard to the opinion of the European Economic and Social Committee (), Acting in accordance with the procedure laid down in Article 251 of the Treaty (), Whereas: 1 A genuine internal market for financial services is crucial for economic growth and job creation in the Com- munity. Major achievements have already been made in the establishment of this internal market, allowing financial institutions to operate in other Member States and ensuring a high level of protection for the consumers of financial services. The communication from the Commission Tmple- menting the framework for financial markets: action plan’ identifies a series of actions that are needed in order to complete the internal market for financial services, and the European Council, at its meeting in Lisbon on 23 and 24 March 2000, called for the imple- mentation of this action plan by 2005. The action plan for financial services stresses as an urgent priority the need to draw up a directive on the prudential supervision of institutions for occupational retirement provision, as these institutions are major financial institutions which have a key role to play in ensuring the integration, efficiency and liquidity of the financial markets, but they are not subject to a coherent Community legislative framework allowing them to benefit fully from the advantages of the internal market. Since social-security ~systems are coming under increasing pressure, occupational retirement pensions will increasingly be relied on as a complement in future. Occupational retirement pensions should therefore be developed, without, however, calling into question the importance of social-security pension systems in terms of secure, durable and effective social protection, which should guarantee a decent standard of living in old age and should therefore be at the centre of the objective of strengthening the European social model. () O] C 96 E, 27.3.2001, p. 136. () O] C 155, 29.5.2001, p. 26. (*) Opinion of the European Parliament of 4 July 2001 (O] C 65 E, 14.3.2002, p. 135), Council common position of 5 November 2002 (not yet published in the Official Journal) and decision of the European Parliament of 12 March 2003 (not yet published in the Official Journal) and decision of the Council of 13 May 2003. (6) This Directive thus represents a first step on the way to an internal market for occupational retirement provision organised on a European scale. By setting the ‘prudent person’ rule as the underlying principle for capital investment and making it possible for institutions to operate across borders, the redirection of savings into the sector of occupational retirement provision is encouraged, thus contributing to economic and social progress. The prudential rules laid down in this Directive are intended both to guarantee a high degree of security for future pensioners through the imposition of stringent supervisory standards, and to clear the way for the effi- cient management of occupational pension schemes. Institutions which are completely separated from any sponsoring undertaking and which operate on a funded basis for the sole purpose of providing retirement bene- fits should have freedom to provide services and freedom of investment, subject only to coordinated prudential requirements, regardless of whether these institutions are considered as legal entities. In accordance with the principle of subsidiarity, Member States should retain full responsibility for the organisa- tion of their pension systems as well as for the decision on the role of each of the three ‘pillars’ of the retirement system in individual Member States. In the context of the second pillar, they should also retain full responsi- bility for the role and functions of the various institu- tions providing occupational retirement benefits, such as industry-wide pension funds, company pension funds and life-assurance companies. This Directive is not intended to call this prerogative into question. National rules concerning the participation of self- employed persons in institutions for occupational retire- ment provision differ. In some Member States, institu- tions for occupational retirement provision can operate on the basis of agreements with trade or trade groups whose members act in a self-employed capacity or directly with self-employed and employed persons. In some Member States a self-employed person can also become a member of an institution when the self- employed person acts as employer or provides his professional services to an undertaking. In some Member States self-employed persons cannot join an institution for occupational retirement provision unless certain requirements, including those imposed by social and labour law, are met.