1. IOPS Principles of private pension supervision
John Ashcroft
President, IOPS
Head of Strategy, UK Pensions Regulator
Supervision of Pension Systems
Current Trends and Issues
Warsaw September 2006

2. IOPS principles of private pension supervision
What is IOPS
What IOPS is doing
The diversity of pension supervision
The common core principles

3. What is IOPS
The International Organisation of Pension Supervisors (IOPS)
An independent international body formed in 2004, representing those involved in the supervision of private pension arrangements.
Currently has around 50 members and observers, representing over 40 countries worldwide - from Australia to Zambia
Covering all levels of economic development and bringing together all types of pension and supervisory systems.

4. IOPS Goals
Serving as the standard-setting body on pension supervisory matters
Promoting international co-operation on pension supervision
Providing a worldwide forum for policy dialogue and exchange of information on pension supervision
Participating in the work of relevant international bodies in the area of pensions, including joint research and activities to improve statistical collection and analysis

5. Programme of Work Key Projects
Risk-based supervision
Joint with World Bank – first project designed to provide a comprehensive source of information on the motivations, practices and outcomes of risk-based methods used by private pension supervisors.
World Bank case studies on Australia, Netherlands, Denmark, Chile, Mexico
IOPS case studies on South Africa, Croatia, Kenya, UK, Germany
IOPS Principles Private Pension Supervision
Approved by Governing Membership in December 2005
Open for consultation until May 2006

6. Programme of Work On-going Projects
Supervisory education, including training of trustees - Kenya*, Ireland, South Africa, United Kingdom, World Bank
Guidelines for compliance with the licensing of pension funds - Australia*, Germany - joint work with the OECD
Cross-border pension supervision - Spain*, Hungary, UK, Luxembourg
Utilisation of IT technology in off-site supervision - Turkey*
Analysis of supervisory structures
- Mexico*
Information for members of DC schemes
- Italy*, Germany, Hungary

7. Cooperation with other organisations
Partnership agreements
OECD
ISSA
IAIS (pending)
Associate Members and Observers
IAA
IMF
World Bank
Cooperation with regional supervisory bodies
AIOS
CEIOPS

8. Conference Schedule First Annual General Meeting held December 2005:
Bylaws amended
Principles approved for consultation
New Executive Committee elected
Australia / Chile / China / Germany Hungary / Italy / Jordan / Kenya / Pakistan / UK / Netherlands
2005 Regional conference held in Bangkok, Thailand:
12 Asian countries represented
100 global delegates in total
2006 Regional conference held in Santiago, Chile:
11 Latin American countries represented
150 global delegates in total (33 countries)

9. 2006/ 2007 Information Meeting Schedule
November 6-8th 2006 Istanbul, Turkey
IOPS committee meetings + AGM, + OECD/ IOPS Pensions Global Forum
March 21-23rd 2007 Amsterdam, the Netherlands
IOPS committee meetings + DNB Pensions Conference
June 1st 2007 Basel, Switzerland
IOPS committee meetings
November 2007, Beijing, China
Annual fees
€7,500 €5,000 €2,500

10. Diversity of supervised markets
DB or DC or both
Mature or developing market
Employer or Government policy driven
Trust-based or financial entities
Relationship with insurance products
Large or small numbers of schemes and plans

11. Pension supervision structures are diverse
Relationship with pensions regulation
Distance from Government
Unitary or combined supervisors

12. Diversity Pension Supervisory Structures

13. There are diverse supervision models
Market regulation
Conduct of business
Prudential
Different supervision paradigms
Transactional – focus on influencing activities
Structural – focus on supervising the entities
Risk-based approaches
Quantitative sophistication
Prioritisation of interventions
Increased emphasis on education

14. But there are many common challenges
Integration of financial markets and supervision structures
Globalisation
Increasing longevity
The low interest rate environment
Adapting to new financial products and transactions Accommodating diversity and individual choice
Transition from investment in public debt
Enhancing corporate governance
Expanding coverage of informal sector and portability
Developing and supervising the pay out phase
Concerns about regulatory burdens
Moving to a risk-based approach

15. IOPS Principles of Private Pension Supervision
Principle 1: Objective
National Laws should assign clear and explicit objectives to pension supervisory authorities
Principle 2: Independence
Pension supervisory authorities should have operational independence
Principle 3: Adequate Resources
Pension supervisory authorities require adequate financial, human and other resources
Principle 4: Adequate Powers
Pension Supervisory authorities should be endowed with the necessary investigatory and enforcement power to fulfil functions and achieve their objectives
Principle 5: Risk Orientation
Pension supervision should seek to mitigate the greatest potential risks to the pension system

16. IOPS Principles of Private Pension Supervision
Principle 6: Proportionality + Consistency
Pension supervisory authorities should ensure that investigatory and enforcement requirements are proportional to the risks being mitigated and that their actions are consistent
Principle 7:Consultation + Cooperation
Pension supervisory authorities should consult with the bodies they are overseeing and cooperate with other supervisory authorities
Principle 8: Confidentiality
Pension supervisory authorities should treat confidential information appropriately
Principle 9: Transparency
Pension supervisory authorities should conduct their operations in a transparent manner
Principle 10: Governance
The supervisory authority should adhere to its own governance code and should be accountable