The UK’s Association of Consulting Actuaries (ACA) has raised concerns that the latest draft of the IORP Directive will hamper a pension fund sponsor’s ability to transfer pension assets across European borders.

Its chairman Paul Kelly said it was “perverse” the Directive, ostensibly meant to promote cross-border activity and enable the easy transfer of assets, would make it “extremely difficult” to do so.

Kelly cited wording in the latest Council of the EU compromise draft that said the regulators of the IORP’s home member state should have the ability to, according to him, “refuse to transfer on the grounds of their opinion”.

The latest draft, drawn up in late November, said regulators from home member states should be able to stop a transfer of assets should it consider the interests of members not “adequately protected during and after” the transfer.

It also retained much of the European Commission’s initial wording that would allow pension funds to question a regulator’s decision in court – powers not granted under the 2003’s Directive.

“Multinationals will be extremely reluctant to invest the time and effort in working with all the stakeholders to proceed with the transfer if the transferring regulator can simply refuse to transfer on the grounds of their opinion,” Kelly said.

“It also means it will be more difficult for multinational companies to sustain existing mature DB plans without the tool of combining these.”

The ACA added that the veto could “kill” defined benefit cross-border activity, despite attempts by member states to relax the procedure whereby cross-border funds could be established – such as funding requirements.

The number of cross-border funds has been limited since the initial IORP Directive was transposed, stagnating for three years from 2010 and only increasing from 82 to 86 at the end of 2013.

French pension fund UMR was in 2012 considering the transfer of its assets to a Belgian organisation for financing pensions (OFP).

In 2013, IPE was given to understand that the French regulator, Autorité de Contrôle des Assurances et des Mutuelles, “advised” the scheme not to proceed.