EUROPE - The development of cross-border pension plans is making slow progress and the number of IORP vehicles set up has increased, according the latest report by the Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS).
But its evidence also suggests ongoing technical complications might prevent employers from providing such plans.
A study was conducted by CEIOPS between June 2008 and June 2009 of the number of arrangements of Institutions for Occupational Retirement Provision (IORP) now in existence, and found another 10 new cross-border IORPs were created in that period.
This figure should mean the total number of IORPs in existence would be 80 - a 14% rise on the 70 cases reported in 2008.
However, the true figure is now 76 IORPs as regulatory authorities of four EU member states also reported they had seen IORPs withdrawals in that same period.
The vehicles were withdrawn either because there had been an internal restructuring or as a result of negotiations with the sponsor, because of key personnel changes or, more worryingly, because authorities at the member states concerned with the withdrawal "could not agree on whether the prudential or the social labour laws applied in respect of the calculation of the minimum guarantee".
Austria, Finland, Luxembourg and Portugal all saw IORP withdrawals in the 12-month period studied, although it is unclear which states were unable to find agreement over the technical provisions of the cross-border plans.
This is the first time CEIOPS has sought reasons for withdrawals, but also used the opportunity to investigate what type of schemes are being set up.
As expected, said CEIOPS, there are still varying definitions as to what constitutes a defined benefit (DB) and a defined contribution (DC) scheme, but the general trend is to favour DC-based IORP arrangements as most new cross-border IORPs are DC-led and have anything between zero and 350 members.
The number of home states conducting IORP activity has actually fallen this year from nine to seven states, as Ireland, Liechtenstein, Luxembourg and the UK all reported new activity this year, while Finland and Portugal said activity has ceased.
Hungary and Romania are two of the 22 new member states acting as host states for IORPs. However, Slovenia has moved out of host territory, according to the supervisory body.
Despite this, CEIOPS said it will "continue to seek an understanding of market developments" and will update the IORPs data in 2010.
CEIOPS is due to be replaced in 2010 as the supervisory body for the European insurance and pensions industry with a new body known as the European Insurance and Occupational Pensions Authority (EIOPA).
The new body will have the power to "resolve supervisor disputes and deliver more consistency in rule enforcement". (See earlier IPE story: EC presses ahead with plans to end CEIOPS)
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