1. Cross-Border Pension Plans in Europe Where Do We Go From Here?
Anne Maher
Chief Executive
The Pensions Board
Ireland
29 August 2006

2. Agenda Cross-Border Plans What is now possible?
How is this likely to develop?
Where will these plans locate?
Next steps 2

3. What is Now Possible Legal Background
EU aim to achieve Single Market for pensions
EU Communication on “The Elimination of tax obstacles to cross-border provision of occupational pensions” (April 2001)
EU Directive 2003/41/EC on “the activities and supervision of Institutions for Occupational Retirement Provision” known as the “Pensions Directive” (September 2003)
The Pensions Directive to be implemented into Member State legislation by 23 September 2005 3

4. EU Pensions Directive Principles
What is Now Possible
EU Pensions Directive Principles
Sets framework for pension scheme supervision
Effectively sets common minimum level of supervision
Moves towards freedom of investment for pension schemes
Facilitates cross-border pension schemes
Provides possible legal framework for Pan European pension schemes 4

5. What is Now Possible
Investment pooling cross-border - already possible and happening
Pooling of liabilities
Pooling of administration 5

6. Development of Cross-Border Business
Types of Cross-Border IORPs
Existing plans which relocate
New employer sponsored cross-border plans
New commercial cross-border arrangements 6

7. Development of Cross-Border Business
Who is Interested
Multinational Employers
For pooling or merging
Employers with Existing Pension Plans
For regulatory or financial advantage
Commercial IORPs Providers
Looking to sell pensions cross-border 7

8. Development of Cross-Border Business
Reasons to relocate
Multinational employer
Better governance/control
Single governance regime
Economies of scale/cost savings
Facilitate corporate change/culture
Accommodate mobile employees
Single employer/single country plan
Regulatory/supervisory regime?
Financial advantage? 8

9. Development of Cross-Border Business
Drivers
Commercial Beneficiaries
For-profit IORPs providers
Advisers to multinationals
Potential providers of cross-border management and administration services 9

10. Influence on Cross-Border Business
Choice of Location
Tax arrangements
Investment opportunities
Pension tradition/services available
Availability of tried and tested pension skills/resources
Regulatory/compliance structures and environment
Ability to accommodate countries outside EU 10

11. Impact on Cross-Border Business
Regulation
Balance between reasonable cost and member protection
Transparent/open environment
Reasonable level of investment freedom
Respected regime
No regulatory arbitrage 11

12. Impact on Cross-Border Business
Obstacles
Social and Labour Law
Tax
Defined Benefit Funding Standards
Pension Reform
Member State attitude
Inexperience
First mover disadvantage 12

13. Location of Cross-Border Business
Any Member State
Attraction of Luxembourg, Ireland, UK, Dutch pooling vehicles? 13

14. 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 14

15. 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) 15

16. Next Steps Implementation of Directive by all EU Member States
Clarification of some Directive requirements
Protocol in operation between Member State pension supervisors
Consideration and decision on location by pension scheme sponsors and commercial providers 16

17. In Conclusion Pensions Directive Full Pan-European Pension Funds
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 17