The Pensions Regulator

Pensions Regulator consults on approach to cross-border schemes

Ref: PN05-32
14 November 2005

A consultation document on the Pensions Regulator's approach to implementing the requirements on cross-border schemes has been published today.

The paper sets out the regulator's overall approach to operating the cross-border requirements. These will come into force at the end of the year, when the Department for Work and Pensions is due to publish the regulations.

A cross-border scheme is one which has European members in more than one EU state.

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.

Some UK schemes may already be operating cross border in the UK under existing special arrangements made between the governments of UK and Ireland.

Such schemes are encouraged to let us know. Complete and return the form at:
www.thepensionsregulator.gov.uk

The consultation document is now on the regulator's website and the pensions industry is invited to take part. Visit: www.thepensionsregulator.gov.uk

Editor's notes

1. The Occupational Pensions Directive provides, for the first time, a common legal framework for the regulation of occupational pensions throughout the EU. Schemes will be able to set up and operate pension schemes that accept contributions from employers from more than one member state.
2. Examples of where schemes would be classed as cross border:
3. • an employer with operations in more than one EU state including the UK (say France, the UK and Germany) and where its European workforce are all members of its occupational pension scheme established in one of those EU States; or
   • a UK employer with an Irish subsidiary (or vice versa) with a pension scheme which has members in both the UK and Ireland.
4. A Department for Work and Pensions consultation on the draft regulations has now closed. To see the consultation documents visit: www.dwp.gov.uk/consultations/2005. The DWP response is expected shortly.
5. The Pensions Regulator has been established as the new regulator of work-based pensions in the UK, with wider and more flexible powers under the Pensions Act 2004. It has replaced Opra which no longer exists.
6. The new powers of the Pensions Regulator include the ability to:
7. • collect more detailed scheme information;
   • impose a statutory obligation on 'whistleblowers' to report suspected breaches of the legislation to the regulator;
   • issue improvement notices and third party notices, enabling the regulator to ensure problems are put right;
   • freeze a scheme that is at risk, while the regulator investigates; and
   • prohibit trustees who are judged not fit and proper to carry out their duties.