| UK-based schemes can apply for cross-border status |
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| 08/01/2006 | |
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The UK's pension authority, the Pensions Regulator, has opened the application process for pension schemes who wish to be considered as "cross-border" under the Occupation Pensions Directive (also known as IORP directive). The Directive has already been implemented by the British government and the Department for Work and Pensions' regulations came into force on 30 December 2005. Mindful that UK pension schemes seeking to operate cross-border will need its authorisation and approval from January 2006, the Pensions Regulator has published a guidance handbook on the process. "Authorisation only needs to be obtained once and is a general procedure", states the watchdog. "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." Schemes wishing to get the IORP status will be held to high standards, among which, the need to be fully funded at all times. Schemes going for the IORP status are however granted a 2-year transitional period for new schemes, or until 22 September 2008 if they are already operating cross-border outside the new regulation. According to the regulator, there are about 100 cross-border plans already operating in the UK which are required to apply for authorisation and approval by 30 March 2006. A pension scheme can be considered cross-border when the scheme or the sponsor is located in the UK, and has pension scheme members that live and work in another EU member state. The same is true if the sponsor company or the scheme is located in the EU outside the UK, in which case the IORP rules of the scheme's home state will apply. The deadline for the implementation of the IORP directive throughout Europe is the end of January 2006 following a 4-month extension. The implementation by national parliaments was first due on 23 September 2005, but only 9 out of the 25 EU Member States had given notification of the upcoming implementation. By the end of November, only four states had actually implemented the Directive into their national legislation, now five with the UK. In the UK, the Pensions Regulator said that 25 schemes had announced their interest in this type of organisation. J.L. |
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