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Growth of cross-border IORPs grinds to halt over last 12 months

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  • Growth of cross-border IORPs grinds to halt over last 12 months

EUROPE - The growth of cross-border Institutions for Occupational Retirement Provision (IORPs) has ground to a halt over the last 12 months, with no change in the number of listings being reported. 

According to the sixth report on cross-border IORP activity conducted by the European Insurance and Occupational Pension Authority (EIOPA), six new cross-border vehicles were registered in Europe between June 2011 and June this year.

Three were reported as providing defined contribution (DC) type benefits, while three were identified as providing defined benefits (DB) in the host state.

But EIOPA also pointed out that six IORPs terminated their cross-border arrangements over the period, which means that the overall number of existing IORPs remains at 84.

By comparison, 2011 saw an increase of 8% while 2010 saw a 3% increase.

In spite of the flat results, three member states reported new cross-border IORPs: Belgium, Ireland and the UK.

In the case of Belgium, the country's organisation for financing pensions (OFP) proposal - which was launched in October 2006 - has attracted its first significant EU cross-border pension activity this year.

Back in May, Charles Vaquier, chief executive at French pension fund UMR, told IPE its scheme was laying the foundations for its first cross-border vehicle, with the delocalisation of its complementary pension business (second pillar) to Brussels as early as September this year.

Since the implementation of the IORP Directive in 2003, which aimed to promote the launch of cross-border pensions activity in Europe, a number of issues have prevented such vehicles from getting off the ground.

While Brussels is looking to implement a revised IORP Directive to better regulate such funds by introducing new requirements based on the Solvency II proposal for insurers, pension representatives claim that a new text would fail to foster cross-border vehicles since the real barriers for their introduction remain the social and labour laws implemented at the national level.

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