Anne MaherChief Executive FrankfurtThe Pensions Board 15 November 2006

EUROPEAN PENSIONS FUNDS EUROPEAN PENSIONS FUNDS CONGRESSCONGRESS

Towards Pan-European Pension VehiclesTowards Pan-European Pension Vehicles

– – Is Europe delivering the right regulation for Is Europe delivering the right regulation for promoting or facilitating cross-border promoting or facilitating cross-border

provision of workplace pensions?provision of workplace pensions?

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AgendaAgenda Progress toward Pan-European Pensions

Is EU Pensions regulation delivering?

What else might be done?

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ProgressProgressLegal

EU aim to achieve Single Market for pensions EU Communication on “The Elimination of tax obstacles to

cross-border provision of occupational pensions” (April 2001)

EU Directive 2003/41/EC on “the activities and supervision of Institutions for Occupational Retirement Provision” known as the “Pensions Directive” (September 2003)

Pensions Directive was to be implemented into Member State legislation by 23 September 2005

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ProgressProgressEU Pensions Directive Principles

Sets framework for pension scheme supervision

Effectively sets common minimum level of supervision

Moves towards freedom of investment for pension schemes

Facilitates cross-border pension schemes

Provides possible legal framework for Pan European pension schemes

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ProgressProgressEU Pensions Directive

Slow implementation by Member States• 20 with full notification• 2 with partial notification• 3 with no notification• EU Commission taking legal action to enforce

Tax infringements in 18 Member States• Dividend and/or interest taxation• EU Commission pursuing in European Court

Committee of European Insurance and Pension Supervisors (CEIOPS) supervising implementation

Budapest Protocol agreed between pension supervisors

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ProgressProgressWhat is now possible

Investment pooling cross-border – already possible and happening

Pooling of liabilities

Pooling of administration

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ProgressProgressOther Current EU Pensions Regulation Initiatives

EU Portability of Pensions Directive

EU Directive on Equal Treatment in supply of goods and services

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Is EU Regulation Delivering?Is EU Regulation Delivering?Obstacles

Social and Labour Law Tax Defined Benefit Funding Standards Pension Reform Member State attitude Inexperience First mover disadvantage

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Is EU Regulation Delivering?Is EU Regulation Delivering? Pensions Directive was a first step in Single Market for

pensions

Implementation is very slow

EU Commission legal enforcement is lengthy process

Needs more indirect support?

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What Else Might Be Done?What Else Might Be Done?

Immediate Steps Implementation of Directive by all EU Member States

Clarification of some Directive requirements

Protocol in operation between Member State pension supervisors

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What Else Might Be Done?What Else Might Be Done? Review of Pensions Directive (happening 2007 / 2008?)

2nd Pensions Directive?

More indirect support through CEIOPS?

EU Commission action to encourage Member States to take positive approach to Single Market for pensions

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In ConclusionIn Conclusion Pensions Directive is reasonable first step

More needs to be done directly and indirectly

Full Pan-European Pension Funds

• Will take time

• And WILL come about

• But need another EU push

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