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PensPlan’s Atzwanger critical of IORP

GERMANY - The EU pension fund directive will not spawn pan-European pension funds but rather induce funds to take a limited cross-border approach, says PensPlan's Michael Atzwanger.

According to Atzwanger, managing director the €500m open pension fund based in Trentino-South Tyrol, pan-European pension funds are an illusion due to a host of unresolved issues related to the directive, Institutions for Occupational Retirement Provision (IORP).

"This includes the delay by member-states in implementing the directive into national legislation, the lack of tax harmonisation in the EU, the lack of harmonisation of rules on how to adopt biometric tables and language issues," Atzwanger told the European Pension Fund Congress in Frankfurt.

"More realistic seems to be a member-state by member-state cross-border approach", he added. PensPlan plans to enter the German market in mid-2007 and will, in particular, target small- to midsize enterprises.

Atzwanger was joined at the Frankfurt congress by Jacqueline Lommen, a Dutch pension fund regulator who is part of the Committee of European Insurance and Occupational Pension Supervisors.

According to Lommen, multi-national companies in Europe are increasingly relying on asset pooling for their European pension plans. She cited IBM, Unilever, GE and Shell as notable examples. On Tuesday, German technology giant Siemens said it was also contemplating an asset-pooling solution.

"But like [Pension Board CEO] Anne Maher, I still think that at some point in the future, pan-European pension funds will come," Lommen added. Maher, who is stepping down at the end of the month, also attended the congress.

Lommen also expressed her view that some form of the Solvency II regime for insurance companies would be applied to pension funds.

"It may not be the current regime being developed for insurers, but I'm convinced that pension funds will come under Solvency II at some point in the future," she said.

Applying Solvency II to pension funds is not, however, supported by all members of CEIOPS. Those who actively support the idea include CEIOPS chairman and Danish regulator Henrik Bjerre-Nielsen as well as Thomas Steffen, head of insurance supervision at Germany's BaFin.

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