There were 33 active cross-border pension funds in the European Economic Area at the end of 2020, covering around 70,000 members and beneficiaries and €11.3bn in assets under management, according to a new report from EIOPA.
This represented 0.2% and 0.4% of the total for IORPs, respectively, the supervisory authority said.
The report is the first in a series of annual reports that EIOPA is planning, focussing solely on cross-border pension funds.
The last time it reported on cross-border IORPs was in a market development report from early 2018, covering the situation as at the end of 2016.
At that time there were 73 active cross-border pension funds, representing €63bn in assets under management.
In its new report, EIOPA said the substantial decrease in the number of cross-border IORPs was primarily the result of the UK leaving the European Union.
“The 19 cross-border IORPs included in the 2017 report with home country UK and the 23 cross-border IORPs with sole host country UK – all with Ireland as home country – are no longer recognised as cross-border IORPs under the definition given in the IORP Directive for cross-border activity,” said EIOPA.
The supervisory authority said the new research confirmed the conclusion from the 2017 report that the number of cross-border IORPs had stopped increasing since 2010 and was not expected to grow substantially.
At the same time, the number of host countries grew compared with the situation in 2016, from 14 to 16 (Denmark, France, Greece and Portugal were added to the list, with the Czech Republic and UK removed).
Belgium remains the “home” member state with the widest geographical spread of cross-border activities, EIOPA said, covering 12 host countries, and the most members and beneficiaries of cross-border IORPs. The Netherlands is the host country with the highest number of cross-border activities.
Existing cross-border IORPs expanding their activities to new host countries has become more pronounced as a trend, according to EIOPA.
It noted that there are 20 per cent fewer cross-border pension funds active in a single host country compared with the 2017 report, and around 25 per cent of the cross-border IOPRs have expanded their activity to a new host country over the past four years.
One such pension fund is Sanofi, which has become the first Belgium-based pension fund to operate cross-border activity in Germany.
With regard to the types of cross-border IORPs, EIOPA said they were still predominantly provided defined benefit (DB) schemes.
Cross-border IORPs used by multiple unrelated employers were on the rise compared with the findings in the 2017 market development report. At the end of 2020, around 33% of the cross-border pension funds provided services to multiple unconnected employers.
One of the main goals of the IORP II Directive is to remove obstacles to occupational pension funds operating across borders in Europe.