”Cross-border pension issues in the EU” Ann Devos Member, CEIOPS OPC Warsaw, 18 Sept. 2006

””Cross-border pension Cross-border pension issues in the EU”issues in the EU”

Ann DevosAnn Devos

Member, CEIOPS OPCMember, CEIOPS OPC

Warsaw, 18 Sept. 2006Warsaw, 18 Sept. 2006

Warsaw, 18 September 2006 2

Topics

• CEIOPS• Work of the OPC

– Budapest Protocol– Cross-border issues

• Closing remarks

I.I.Committee of European Committee of European

Insurance and Occupational Insurance and Occupational Pensions SupervisorsPensions Supervisors

(CEIOPS)(CEIOPS)


Lamfalussy Approach

Level 1: Level 1: Framework PrinciplesFramework Principles

Level 1: Level 1: Framework PrinciplesFramework Principles

Level 2: Level 2: Decision MakingDecision Making

Level 2: Level 2: Decision MakingDecision Making

Level 3:Level 3: ImplementationImplementation

Level 3:Level 3: ImplementationImplementation

Level 4: Level 4: EnforcementEnforcement

Level 4: Level 4: EnforcementEnforcement

Commission, Council, Parliament

Commission, EIOPC

CEIOPS, CEBS, CESR

Commission, Member States


Tasks

• L2 activities: advise the Commission on implementation measures and regulations

• L3 activities: – establish supervisory standards– forum for supervisory cooperation

enhance effective application of regulations

facilitate cooperation between supervisors convergence of supervisory practices


Members’ Meeting Managing

BoardConsultative Panel CEIOPS Secretariat

WORKING GROUPSInsurance Groups

SupervisionFinancial Stability

Occupational PensionsInsurance Intermediaries

Solvency II- Pillar I Solvency II- Pillar IISolvency II- Pillar III/Accounting

Solvency II- Groups/Cross-sector

European Institutions (Parliament, Council, Commission)

II.II.Work of the Occupational Work of the Occupational

Pensions CommitteePensions Committee

(OP(OPCC))


Occupational PensionsCommittee• permanent Committee• secretariat in Budapest (HFSA)• 24 members + 1 observer• 5 meetings a year• attendance of the Commission and

Secretariat• feedback to the Members’ Meeting


Working Plan

• to support the smooth implementation of the IORP Directive– developing common understanding– developing protocols for supervisory

cooperation– coordination and exchange of information

on cross-border membership


Working Plan (2)

• to monitor the application of the Directive– calculation of technical provisions– application of investment rules– optional application of the Directive

• to analyse the regulatory situation of pension savings institutions

• to serve as a basis for supervisory convergence

BUDAPEST ProtocolBUDAPEST Protocol

a framework for the cooperation of supervisors in the area of cross-border

activity


Development

• first draft Sept. 2004• first public consultation 28 Feb. 2005

– comments from 4 organisations– discussed in OPC

• second public consultation 28 Oct. 2005• approval CEIOPS Members’ Meeting Feb.

2006


Supervisory Frameworkgeneral picture

Home Host

IORP

Auth.

Sponsor

Auth.

employees

Host nameSponsor nameMain char.

S&L lawInfo req.Inv. rules

Prudential supervision

Social supervision

pension scheme


”Open Doors” Approach

CA CA

Home Host

CACA CACA

CA

CA

CA

CA


Content of the Protocol• general considerations• authorised IORPs and the notification

process• ongoing supervision and exchange of

information after the notification process• appendices


General Considerations• CEIOPS members, non-CEIOPS competent

authorities of EEA States• commitment to cooperate in all cases

required under the Directive• aim to harmonise documents• additional cooperation where needed• language used for cooperation


Notification Procedure• only authorised IORPs can start operating

cross-border• such authorisation has to be granted only

once– not for each cross-border activity


Ongoing Supervision

• dialogue between the authorities– changes in provided information about the

laws, the pension schemes and the IORPs– sharing information about interventions

• procedures in case of non-compliance• ring-fencing of the assets and liabilities


step by step …


Ex. : Belgium - Poland

Belgian IORP Polish undertaking

główne cechy systemuemerytalnego

Belgian supervisor Polish supervisor

pension scheme

notification





prawo socjalne i prawo pracy wymogi informacyjneograniczenia inwestycyjne

pension scheme





info on

compliance, interventions, …

prudential supervision social supervision

pension scheme


Ex. : Poland - Belgium

Polish IORP Belgian undertaking

voornaamste kenmerken pensioenregeling

Polish supervisor Belgian supervisor

pension scheme

notification





sociale en arbeidswetgevinginformatievereistenbeleggingsregels

pension scheme





info on

compliance, interventions, …

prudential supervision social supervision

pension scheme

Cross-border IssuesCross-border Issues

Trust, convergence, common understanding, exchange of information

and experience.


Trust in Each Other

• host authority relies on home’s judgement about the authorisation and notification

• host authority relies on home’s control, except– relevant S&L law– information requirements

• host authority relies on home’s measures, except– lack of measures, or – measures, taken against the breach of

relevant S&L law, not effective


Supervisory Convergence• different levels of convergence

– in the field of occupational pensions– with other financial services

• in the field of occupational pensions– to avoid supervisory arbitrage– prudent person rule: exchange of

experience– exchange of information on supervisory

framework and content


Common Understanding• fully funding• ring-fencing• subordinated loans


Exchange of Information• investment rules• custody and depositary• reporting and information requirements• insolvency and insurance systems• cross-border membership• optional application of the Directive• private schemes and the EU legislation

– not covered ”pillars”, institutions and activities


Exchange of Experience• authorisation and notification procedures• supervisory actions/sanctions• supervisory approaches• case studies

III.III.Closing RemarksClosing Remarks


Expectations

• the OPC should not be expected to– overtake responsibilities from member

states– determine the relevant S&L law– find a solution for regulatory problems– reach a uniform application of the whole

Directive


Closing Remarks

• implementation of the Directive– 20 countries OK, 2 partial notification, 3 no

notification– quality matters rather than time– long process: primary and secondary

legislation• pan-European pension funds• not classical pan-European solutions

– asset pooling– central services


Closing Remarks

• pensions coordination– no competent body on S&L law– competent authorities having no

supervisory responsibility– several aspects of pension services

• supervisory cooperation– CEIOPS-CEBS-CESR

Thank you for your attention !Thank you for your attention !Dziękuję za uwagę !Dziękuję za uwagę !

Dank u voor uw aandacht !Dank u voor uw aandacht !

more info on more info on www.ceiops.org

Documents

”Cross-border pension issues in the EU” Ann Devos Member, CEIOPS OPC Warsaw, 18 Sept. 2006