Governance of Cross-Border Pension Schemes – The Irish Regulator’s Perspective

1. APLI/IPEBLA Conference Governance of Cross-Border Pension Schemes – The Irish Regulator’s Perspective Anne Maher, Chief Executive and Brendan Kennedy, Actuarial Adviser The Pensions Board 2 June, 2006

2. Agenda • Background to cross-border governance • Irish cross-border governance • Ireland as cross-border pensions location (and regulator) 2

3. Background Instruments • EU Directive 2003/41/EC on the Activities and Supervision of Institutions for Occupational Retirement Provision (“IORPs Directive”) • Implementation of IORPs Directive into national law • Protocol relating to Collaboration of Relevant Competent Authorities 3

4. Background Irish Implementation • Social Welfare and Pensions Act, 2005 inserts Part XII of the Pensions Act, 1990 (as amended) • Occupational Pension Schemes (Cross-Border) Regulations, 2006 covers: • Authorisation • Notification • Social and Labour Law • ‘Minimalist’ implementation 4

5. Cross-Border Governance Irish Social and Labour Law • Part III of Pensions Act • Preservation provisions and minimum value of contributory retirement benefits • Part Vof Pensions Act • Disclosure of information requirements • Section 59B • Prohibition on reducing pension payable • Section 59C • Protects pensions in payment which are integrated with State pension 5

6. Cross Border Governance Funding Requirements • Fully funded at time of application • Managed for full funding • Underfunded schemes – Board approval • Pensions Board guidelines • EU Commission clarification 6

7. Cross Border Governance Practical Requirements • New schemes: • Registration / authorisation • Notification • Waiting period • Existing schemes: • Authorisation / notification • Waiting period 7

8. Ireland as Pensions Location • Tax arrangements • Irish law incorporates cross border tax reliefs • Investment Opportunities • Common Contractual Fund (CCF) • Pension tradition/services available • Ireland has long established private pension structure • Availability of tried and tested pension skills/resources • Investment, Actuarial, Accounting, Legal, Benefit consulting, Benefit administration, Compliance skills available in Ireland • Regulatory/compliance regime • Acceptable and balanced regulation by open and accessible regulators/supervisors in Ireland • Ability to accommodate countries outside EU • Global services available in Ireland 8

9. Ireland as Pensions Location • Pan-European Pensions Task Force • Examining opportunities in international pensions area • Will facilitate initiatives/changes • Suite of asset pooling vehicles • Unit Trust (Fixed Income Investments) • Limited Partnership • UCITS CCF (Equities Investments) • Non-UCITS CCF (Alternative Investments) 9

10. Ireland as Pensions Location Irish Regulation • Balance between reasonable cost and member protection • Transparent/open environment • Reasonable level of investment freedom • Acceptable (we hope “respected”!) 10

11. Next Steps • Clarification of some Directive requirements • Protocol “working” between Member State pension supervisors • Consideration and decision on location by pension scheme sponsors and commercial providers 11

12. In Conclusion • Pensions Directive • Is first step in single market for pensions • Provides a framework for change • Investment/asset pooling is happening • Liability pooling and centralised administration are next steps • Full Pan-European Pension Funds • Will take time • But WILL come about 12