The Pensions Regulator

Regulator invites applications for cross-border pension schemes

Ref: PN05-37
23 December 2005

The Pensions Regulator welcomes applications from pension schemes who wish to operate cross-border and has today published guidance and application forms on its website.

Schemes that have employees in more than one European Union state may find it useful to run a cross-border pension scheme as this can help reduce administration costs. The guidance should also be read by schemes that are already operating cross-border.

From January 2006, UK pension schemes wishing to operate cross-border will need to get authorisation and approval from the Pensions Regulator. The guidance explains this two-stage process and both forms are now available on the regulator's website. Authorisation only needs to be obtained once and is a general procedure. The approval process examines the arrangements with a specific EU state and needs to be completed each time a scheme wants to operate cross-border in an additional country, or to take contributions from an additional employer, in the EU.

To read the guidance and download the application forms visit the EU cross-border section of our website.

Editor's notes

1. The new requirements are part of the EU Directive 2003/41, commonly known as the IORP or Occupational Pensions Directive. The Department for Work and Pensions’ regulations are due to come into force on 30 December 2005.
2. The Occupational Pensions Directive provides, for the first time, a common legal framework for the regulation of occupational pensions throughout the EU.
3. Cross-border pension schemes will only be authorised to operate cross-border where they meet more stringent funding requirements.
4. Cross-border schemes must be fully-funded at all times, but there is a transitional period allowed for them to do this if they are a new scheme or if they are already operating cross- border. New pension schemes will have two years from date of application to become fully funded. Existing schemes that already operate cross-border have until 22 September 2008 to become fully funded.
5. Cross-border pension schemes are not able to put in place a recovery plan, however they may be able to have a short recovery period.
6. There are estimated to be up to 100 cross-border schemes already operating in the UK and these schemes are required to apply for authorisation and approval by 30 March 2006.
7. 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.
8. The new powers of the Pensions Regulator include the ability to: