Cross-border%20European%20pension%20funds%20(IORPs)%20The%20positioning%20of%20The%20Netherlands%20in%20the%20emerging%20European%20pension%20market%20%20Jacqueline%20Lommen - PowerPoint PPT Presentation

View by Category
About This Presentation
Title:

Cross-border%20European%20pension%20funds%20(IORPs)%20The%20positioning%20of%20The%20Netherlands%20in%20the%20emerging%20European%20pension%20market%20%20Jacqueline%20Lommen

Description:

Cross-border European pension funds (IORPs) The positioning of The ... regulation of the country of domicile of the pension institution ('Home country' ... – PowerPoint PPT presentation

Number of Views:96
Avg rating:3.0/5.0
Slides: 26
Provided by: european9
Learn more at: http://www.europeanpensions.net
Category:

less

Write a Comment
User Comments (0)
Transcript and Presenter's Notes

Title: Cross-border%20European%20pension%20funds%20(IORPs)%20The%20positioning%20of%20The%20Netherlands%20in%20the%20emerging%20European%20pension%20market%20%20Jacqueline%20Lommen


1
Cross-border European pension funds (IORPs)The
positioning of The Netherlands in the
emergingEuropean pension market Jacqueline
Lommen
  • European Pension Summit Amsterdam 11 November
    2009

2
Agenda
  • The IORP Directive - some basics
  • IORP Market developments
  • The Netherlands PPI, MOPF API
  • Questions Discussion

2
IORPs Institutions for Occupational Retirement
Provision
3
Agenda
  • The IORP Directive - some basics
  • IORP Market developments
  • The Netherlands PPI, MOPF API
  • Questions Discussion

IORPs Institutions for Occupational Retirement
Provision
4
European Pensions Directive state of affairs
  • IORP Directive (2003/41/EC) has been issued in
    2003
  • Implemented in 2005 2007
  • All EEA30 member states have IORPs in place
  • 30 different IORP vehicles
  • Circa 10,000 IORPs
  • Circa 100 cross-border IORPs

5
IORPs Pension institution vs. schemes
IORP Directive
IORP Pensioninstitution (financing vehicle,
Legal entity)
Pensionscheme A
Pensionscheme B
Pensionscheme C
Single lead supervisor
Regulated by the social labour law of the
country of origin of the pension scheme(s)
(Host countries)
Regulated by the (financial) regulation of the
country of domicile of the pension institution
(Home country)
IORP Institution for Occupational Retirement
Provision
6
IORPs Pension vs. Asset vs. Risk pooling
Risk pooling
Company A
Local company / local subsidiary
UK
BE
NL
Pension institution
Pension assets
Investment portfolio
Pension pooling (IORP)
Asset pooling (UCITS)
7
Agenda
  • The IORP Directive - some basics
  • IORP Market developments
  • The Netherlands PPI, MOPF API
  • Questions Discussions

IORPs Institutions for Occupational Retirement
Provision
8
IORPs meeting market needs
Members
CFO / CRO
Flexibility maintain the local scheme
specifics e.g. format (DC/DB,
indexation), financing (funding
level, contributions), solidarity
(ring-fencing), etc. Own identity
maintain governance (social committee),
Information (language), etc.
Reduced operational risks More grip and control
(IFRS, compliance, IORP2)
  • Simplified governance
  • Reduced internal management time
  • Improved operational oversight
  • Integral risk management

Efficiency gains (economies of scale)
  • Investment performance enhancement
  • Consistent administration hub(s)
  • Better access to top quality resources
  • Fewer providers and interfaces
  • Lower regulatory burden
  • Single reporting
  • Lower / more flexible financing
  • Tax advantages

Cost savings (single European entity)
HRM / IEB manager
Pension provisions for mobile employees and sr
executives
Internal branding (common look/feel, equality)
Anticipating and digesting MA transactions
divestitures
Framework for implementing change (across Europe)
9
IORPs a step-by-step approach
Pan-euro IORP
Pension pooling (IORP)
Expats / Sr executives (IORP)
Asset pooling
Risk pooling
IEB Database
Benefit audit / pension benchmarking
Accounting consolidation
Corporate HQ EB manager / global pensions
department
10
Real life examples IORPs
  • Early movers (CEIOPS overview)
  • Existing cross-border cases
  • Internationally mobile employees and senior
    executives
  • Multinational companies
  • Combining 2 or more existing local pension
    schemes or IORPs, stepwise
  • Creating new single pan-European or regional (DC)
    pension platform
  • MA consolidation into group / anticipating and
    digesting divestitures
  • Financial Service Providers
  • IORP subsidiaries of financial services providers
  • New markets, product development

11
IORP Location - Regional clusters
  • Ireland
  • Anglo-Saxon region (UK, US)
  • contract law / trustees
  • DC focus
  • asset pooling focus
  • ????
  • East-European region
  • DC focus
  • admin hubs
  • uniform DC schemes
  • Belgium
  • Continental European region
  • DB / DC
  • integral pension offering
  • checks balances governance
  • Liechtenstein ??
  • German-speaking (DE, CH, AT, IT, SCAN)
  • DB focus
  • integral pension offering
  • rules-based
  • insuranceculture
  • Luxembourg
  • Broad regional base
  • DB / DC
  • asset pooling focus
  • corporate control
  • financial service providers

12
Agenda
  • The IORP Directive - some basics
  • IORP Market developments
  • The Netherlands PPI, MOPF API
  • Questions Discussions

IORPs Institutions for Occupational Retirement
Provision
13
Algemene PensioenInstelling (API) 3 phases
  • change existing IORP vehicle (?)
  • Pension Law (Pw) (?)
  • Ministry of Social Affairs (?)
  • broad scope
  • target group local and foreign mutinationals

Phase III
API Algemene PensioenInstelling
  • change existing IORP vehicle (pensioenfonds)
  • Pension Law (Pw)
  • Ministry of Social Affairs
  • strict and limited scope
  • target group Dutch multinationals

Multi-OPF multi Ondernemings-PensioenFonds
Phase II
PPI Premie Pensioen- Instelling
  • new Dutch IORP vehicle
  • Financial Law (Wft)
  • Ministery of Finance
  • strict and limited scope
  • target group foreign multinationals

Phase I
14
Different IORP vehicles selection criteria
  • Funding requirements
  • Size of technical provisions ánd security
    mechanisms
  • Flexibility of funding
  • Governance
  • Founders, legal form, board composition, social
    committees
  • Compliance regulation
  • Scope
  • Kind of schemes, risk-bearing, outsourcing,
    clients, etc.
  • Ring-fencing
  • Investment restrictions
  • Other
  • Support authorities
  • Discretionary powers supervisor

15
IORPs - technical provisions differ considerably
Source CEIOPS Survey on fully funded,
technical provisions and security mechanisms in
the European occupational pension sector, 4/2008

16
IORPs financial requirements
Protection institution
Sponsor covenant
Security mechanisms
Balance sheet IORP
Additional assets
Solvency buffers / subordinated loans
Regulatory own funds
Additional assets
105
Fully funded
Assets
Technical provisions
100
17
Positioning Dutch IORP vehicles
Pensioenfonds PPI (API Phase I) MOPF (API Phase II) OFP / ASSEP (API Phase III)
Management composition
Ownership / founders
Legal form






18
Positioning Dutch IORP vehicles
Pensioenfonds PPI (API Phase I) MOPF (API Phase II) OFP / ASSEP (API Phase III)
Management composition
Ownership / founders
Legal form
Schemes
Activities
Risks
Ring-fencing


19
Positioning Dutch IORP vehicles
Pensioenfonds PPI (API Phase I) MOPF (API Phase II) OFP / ASSEP (API Phase III)
Management composition
Ownership / founders
Legal form
Schemes
Activities
Risks
Ring-fencing
Financing requirements
Regulatory framework
20
Positioning Dutch IORP vehicles
Pensioenfonds PPI (API Fase I) MOPF (API Fase II) OFP / ASSEP (België/Lux)
Management composition employers / employees flexible employers / employees
Ownership / founders employers / employees flexible Employers / employees
Legal form flexible (Stichting) flexible flexible (Stichting)
Schemes all all (NL no DB) all
Activities limited (domein) flexible limited (only NL)
Risks flexible forbidden flexible
Ring-fencing forbidden optional mandatory
Financing requirements FTK not applicable FTK
Regulatory framework ex-ante by law not applicable ex-ante by law
Orange colour additional requirements on
top of IORP Directive
21
Positioning Dutch IORP vehicles
Pensioenfonds PPI (API Fase I) MOPF (API Fase II) OFP / ASSEP (België/Lux)
Management composition employers / employees flexible employers / employees flexible social comite
Ownership / founders employers / employees flexible Employers / employees flexible
Legal form flexible (Stichting) flexible flexible (Stichting) flexible
Schemes all all (NL no DB) all all
Activities limited (domein) flexible limited (only NL) flexible
Risks flexible forbidden flexible flexible
Ring-fencing forbidden optional mandatory optional
Financing requirements FTK not applicable FTK IORP Dir
Regulatory framework ex-ante by law not applicable ex-ante by law ex-post/ante discretionary
Orange colour additional requirements on
top of IORP Directive
22
Positioning The Netherlands in the European 2nd
pillar oocupational pension market
  • Traditionally very well-positioned (broad
    knowledge, long tradition, size
  • and depth of the market, experienced
    providers)
  • Lack of efficient cross-border IORP vehicle
  • PPI and MOPF vehicle in Parliament hopefully to
    become available
  • in Q2/2010
  • Phase III API of key importance for Nederland
    Pensioenland

23
Agenda
  • The IORP Directive - some basics
  • IORP Market developments
  • The Netherlands PPI, MOPF API
  • Questions Discussions

IORPs Institutions for Occupational Retirement
Provision
24
  • Hewitt Associates
  • Pan-European Pensions Team
  • Tel 31.88.100.6461
  • Mobile 31.6.34736.273
  • Email Jacqueline.Lommen_at_Hewitt.com
  • Paul.Bonser_at_Hewitt.com

25
Cross-border European pension funds (IORPs)The
positioning of The Netherlands in the
emergingEuropean pension market Jacqueline
Lommen
  • European Pension Summit Amsterdam 11 November
    2009
About PowerShow.com