European pension funds look set to escape a requirement to put a fixed share of their assets into start-ups. A proposal requiring larger occupational pension funds to invest at least 2% of assets in European venture capital failed in negotiations, according to preliminary texts from the European Parliament’s Economic and Monetary Affairs Committee reported by Het Financieele Dagblad. NL Times carried the report on 25 October 2026. The idea came from Damian Boeselager, a German Volt MEP and Parliament’s rapporteur on the revision of IORP II, the directive that governs workplace pension funds.
For ABP, one of the largest Dutch funds, the rule would have meant about €11bn of mandatory venture investment. ABP has already allocated €1bn to European venture capital funds on its own initiative. Its chair, Harmen van Wijnen, criticised Brussels for tightening rules on risk diversification and transparency and said pension funds are not an ATM for companies or governments that need money, NL Times reported.
A quota added to a permissive proposal
The requirement came from Parliament, not the Commission. The Commission’s supplementary pensions package proposed amending IORP II, in line with the objectives of the savings and investments union strategy. Its emphasis was on freedom rather than direction: the proposals clarify the standard for those managing pension schemes’ assets and are meant to help funds “diversify their investment portfolios including in equity”. The 2% floor arrived later, in Boeselager’s draft report.
The Dutch sector’s objection is to direction, not to investment freedom. In February the Pensioenfederatie, the Dutch pension federation, welcomed the Commission’s plan to give funds more flexibility to invest in alternative asset classes, while warning that a proposal to benchmark returns could discourage funds from investing in alternative and illiquid categories.
Mandates versus fiduciary duty
Opposition to the quota came from pension funds and, more tellingly, from the venture industry itself. “We believe it would be better if pension funds could decide their investment policies themselves. Venture capital is not a suitable investment for every pension fund,” said Felix Zwart of the NVP, the Dutch private equity and venture capital association, in June. Zwart also doubted that European venture capital “could absorb investments of this magnitude.” NVP data showed Dutch pension funds had invested around €1.2bn in Dutch start-up funds at the end of 2025. Simone Miotto, executive director of the European Association of Paritarian Institutions (AEIP), called it a “red line that should not be crossed.”
The dispute is about who decides. A statutory floor replaces a pension board’s judgement of its members’ interests with a legislator’s, and creates forced buyers in a market that, on Zwart’s account, may lack enough promising start-ups to absorb the money. A floor set as a share of total assets also moves with markets: a rally in listed holdings would push funds below the minimum and oblige fresh commitments whatever the valuations on offer.
The case for intervention has not disappeared. ABP’s voluntary €1bn is a fraction of the €11bn the rule implied, and Brussels still wants more pension savings in private and listed equity. The texts are also preliminary. Until Parliament votes and the three institutions agree a final text, the outcome is not settled.
Why it matters for long-horizon owners
For pension funds and sovereign investors with European exposure, the result keeps allocation a governance decision rather than a compliance one. Boards that hold venture capital will still have to justify its illiquidity, long lock-ups and fees on their own risk and return terms, and those that do not would face no quota. For managers raising European venture funds, the pension money they court will have to be won on performance rather than delivered by statute.
What to watch
The European Parliament is expected to vote on the proposals in early November. Formal negotiations between Parliament, the Council and the Commission follow, and NL Times reports that Brussels aims for a definitive agreement by the end of 2026 or early 2027. The test is whether a softer instrument, such as incentives in place of a floor, emerges in those talks.
Sources
- Dutch pension funds stop Brussels from steering members’ savings into European startups, NL Times, 25 October 2026
- L’UE rejette la proposition visant à obliger les fonds de pension à investir dans des start-ups européennes, Business AM, 26 October 2026
- Ensuring adequate retirement income for EU citizens, European Commission, 20 November 2025
- Pensioenpakket helpt ontwikkeling Europese pensioenstelsels, aanpassingen IORP2-voorstel nodig, Pensioenfederatie, 20 February 2026
- Dutch venture capital association opposes EU mandatory pension fund allocation, IPE, 29 June 2026
- Proposed 2% VC investment mandate for larger IORPs faces opposition, European Pensions, 9 October 2026