The U.K. pensions regulator proposed a framework to allow cross-border pensions vehicles that could be sold to plan sponsors throughout the European Union, a move that could attract more multinational "commercial opportunities," according to a consultation document released today.
Other considerations involve "both our obligation to members and to reducing risk of claims against the Pension Protection Fund," the U.K. equivalent of the PBGC. The government agency suggested funding requirements for cross-border plans that are "stricter and have more immediate effect than those for domestic schemes." For example, they need to demonstrate that they're fully funded at the time of application for approval to operate in the United Kingdom.
The recommendations were spurred by the European Occupational Pensions Directive, which was adopted in 2003 and requires EU countries to establish a common framework allowing cross-border development of occupational pension schemes. Following a consultation period ending Dec. 12, the U.K. Department of Work and Pensions will finalize cross-border regulations scheduled to be effective by Jan. 1, according to the document.
