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From the European Union through the Region to Hungary. Mihály Erdős Strategy Policy Director CEIOPS OPC Chair Erdos.Mihaly@pszaf.hu Tel.: +36/1-489-9610. The Framework. EU Regulatory and Supervisory Framework Pension Market in the CEE Region Hungarian Fund Development.
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From the European Union through the Regionto Hungary Mihály Erdős Strategy Policy Director CEIOPS OPC Chair Erdos.Mihaly@pszaf.hu Tel.: +36/1-489-9610
The Framework • EU Regulatory and Supervisory Framework • Pension Market in the CEE Region • Hungarian Fund Development
Regulatory and Supervisory Framework • Lamfalussy approach • clear responsibilities • cooperation • supervisors: Level 3
CEIOPS and the OPC • enhance the smooth implementationof the IORP Directive • focus on cross-border issues
I. pillar: state, PAYG II. pillar: occupational plans III. pillar: personal plans I. pillar: new 1408 Regulation II. pillar: IORP and Portability Directive III. pillar: financial services directives But: PL, EE, HU The EU Pension Regulation
EU Pension Fund Markets Source: OECD
World’s Largest Funds(2002, USDbn) Source: OECD
„Cross-border” Funds in the EU Source: IPE
A „Simplified” Model for Pan-European Funds IORP Asset M. Admin. IORP Directive IT ALM Pension scheme Pension scheme Relevant S&L law Employer & employees Employer & employees Source: EU IMS DG
PersonalRemarks • implementation : the majority by June • pan-European funds: a pioneer needed • not classical solutions: asset pooling (IRL, LU) • decline of traditional DB’s: funding • increasing life expectancy, market valuation of liabilities • poor equity markets, decline in interest rates • labour market requirements • responses (OECD – NAPF) • raising employer contribution • closing DB, opening DC for new employees
The Regional Market Source: IPE
The Regional Market Source: IPE
The Regional Market Source: IPE
The Hungarian Market • concentrated market • similar to other financial markets
Asset Management • conservative investment policy • driven by members • disclosure requirements • lack of proper investment tools • introduction of lifestyle investment • more stocks and foreign investment • pension reform does not solve the problems of domestic capital market
Development of Voluntary Funds • driving force: employer • generous tax treatment • absolute or relative • selling: based on employer • mandatory - members
Instead of Conclusions • mandatory: escape from the state – no marketing • market done from the beginning • no cross-sellingdata use • cost effective in comparison with others • IT problems – collection system • two pillars together