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Cross-border pension issues in the EU

• Ann Devos
• Member, CEIOPS OPC
• Warsaw, 18 Sept. 2006

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Topics

• CEIOPS
• Work of the OPC
• Budapest Protocol
• Cross-border issues
• Closing remarks

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I.Committee of European Insurance and
Occupational Pensions Supervisors

• (CEIOPS)

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Lamfalussy Approach
Level 1 Framework Principles
Commission, Council, Parliament
Level 2 Decision Making
Commission, EIOPC
Level 3 Implementation
CEIOPS, CEBS, CESR
Level 4 Enforcement
Commission, Member States
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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

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European Institutions (Parliament, Council,
Commission)
Members Meeting
Managing Board
Consultative Panel
CEIOPS Secretariat
WORKING GROUPS Insurance Groups
Supervision Financial Stability Occupational
Pensions Insurance Intermediaries Solvency II-
Pillar I Solvency II- Pillar II Solvency II-
Pillar III/Accounting Solvency II-
Groups/Cross-sector
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II.Work of the Occupational Pensions Committee

• (OPC)

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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

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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

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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

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BUDAPEST Protocol

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

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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

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Supervisory Frameworkgeneral picture
Home
Host
pension scheme
IORP
Sponsor
employees
Host name Sponsor name Main char.
Prudential supervision
Social supervision
SL law Info req. Inv. rules
Auth.
Auth.
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Open Doors Approach
Home
Host
CA
CA
CA
CA
CA
CA
CA
CA
CA
CA
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Content of the Protocol

• general considerations
• authorised IORPs and the notification process
• ongoing supervision and exchange of information
  after the notification process
• appendices

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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

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Notification Procedure

• only authorised IORPs can start operating
  cross-border
• such authorisation has to be granted only once
• not for each cross-border activity

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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

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step by step
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Ex. Belgium - Poland
pension scheme
Belgian IORP
Polish undertaking
notification
glówne cechy systemu emerytalnego
Belgian supervisor
Polish supervisor
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Ex. Belgium - Poland
pension scheme
Belgian IORP
Polish undertaking
prawo socjalne i prawo pracy wymogi
informacyjne ograniczenia inwestycyjne
Belgian supervisor
Polish supervisor
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Ex. Belgium - Poland
pension scheme
Belgian IORP
Polish undertaking
prudential supervision
social supervision
info on compliance, interventions,
Belgian supervisor
Polish supervisor
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Ex. Poland - Belgium
pension scheme
Polish IORP
Belgian undertaking
notification
voornaamste kenmerken pensioenregeling
Polish supervisor
Belgian supervisor
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Ex. Poland - Belgium
pension scheme
Polish IORP
Belgian undertaking
sociale en arbeidswetgeving informatievereisten be
leggingsregels
Polish supervisor
Belgian supervisor
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Ex. Poland - Belgium
pension scheme
Polish IORP
Belgian undertaking
prudential supervision
social supervision
info on compliance, interventions,
Polish supervisor
Belgian supervisor
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Cross-border Issues

• Trust, convergence, common understanding,
  exchange of information and experience.

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Trust in Each Other

• host authority relies on homes judgement about
  the authorisation and notification
• host authority relies on homes control, except
• relevant SL law
• information requirements
• host authority relies on homes measures, except
• lack of measures, or
• measures, taken against the breach of relevant
  SL law, not effective

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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

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Common Understanding

• fully funding
• ring-fencing
• subordinated loans

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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

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Exchange of Experience

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

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III.Closing Remarks
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Expectations

• the OPC should not be expected to
• overtake responsibilities from member states
• determine the relevant SL law
• find a solution for regulatory problems
• reach a uniform application of the whole Directive

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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

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Closing Remarks

• pensions coordination
• no competent body on SL law
• competent authorities having no supervisory
  responsibility
• several aspects of pension services
• supervisory cooperation
• CEIOPS-CEBS-CESR

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Thank you for your attention !Dziekuje za uwage
!Dank u voor uw aandacht !

• more info on www.ceiops.org