UK – The UK’s Pensions Regulator says around 25 pension schemes have registered an interest in operating cross-border under the new EU directive on occupational pension funds.
“We have sought information on our website on cross-border schemes and some of these responses have enabled us to form a view as to the impact of particular proposals on potential cross-border schemes,” the regulator revealed in its 37-page cross-border consultation document today.
“Some 25 or so schemes have registered an interest so far.”
“Our intention is firmly to ensure that such schemes are not deterred from seeking the UK as their home regulator,” the regulator said.
“We recognize the opportunity that the cross-border framework offers, particularly for multinational companies many of whom are located in our jurisdictions.
The regulator said the Department for Work and Pensions regulations on the transposition of the directive, currently in draft form, are expected to be in place by the end of the year. The consultation period has been cut to just four weeks due to the time constraints.
The Regulator is proposing a middle way between overly bureaucratic regulation and the lightest possible approach. It doesn’t want to impose a “disproportionate regulatory burden”.
The DWP’s cross-border regulations are anticipated to commence on January 1 2006, the regulator said.
The regulator would use its “own intelligence” about whether the people running the schemes are persons of good repute with professional qualifications.
Applications from schemes which wish to operate cross border are welcomed and encouraged. Schemes need to seek prior authorisation and approval before they can start to accept contributions from members in another EU state.
The regulator's objectives, to protect members' benefits and reduce the risks of claims falling on the Pensions Protection Fund, will apply as much to UK-based cross-border schemes with members in other EU states as to schemes with members based only in the UK.
The new requirements are part of European Directive 2003/41 (commonly known as the IORP or Occupational Pensions Directive) and apply to the member states of the European Union. There is a legal obligation to comply with the Directive.