EUROPE - Cross-border passporting of schemes should be allowed between EU countries with similar social and labour law and pension systems, the Society of Pension Consultants says.
In its draft response to the EU Green Paper on pensions, seen by Global Pensions' sister title, Professional Penions, the SPC said passporting of schemes between, for example, the UK and Ireland or within the Benelux countries, would mean compliance with one set of rules rather than 27.
The SPC said the area of Institutions for Occupational Retirement Provision regulations that seem to give rise to the greatest difficulties is the requirement that the scheme comply with local “social and labour law”.
The paper said: “Potentially this could mean up to 27 different versions of processes, plus an ongoing need to monitor changing requirements in each state and make changes accordingly.”
At present, home member states can object to an IORP operating in their state if it does not meet this requirement. However, for most schemes the precise requirements they must meet in each state are unclear, effectively making cross-border activity impractical.
The SPC said the EU should set minimum harmonisation conditions, which would apply in place of each state’s own local social and labour laws and all states must comply with in the establishment and operation of cross-border IORPs.
For example: minimum entry ages; maximum waiting periods before an employee can join; minimum requirements for entitlement to benefits; and rights to a refund of contribution.
It added schemes that meet these minimum requirements could automatically be passported into any member state, without objection.
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