34605 10.10

DIRECTIVE 2003/41/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL
of 3 June 2003
on the activities and supervision of institutions for occupational retirement provision
THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE This Directive thus represents a first step on the way to an internal market for occupational retirement provisionorganised on a European scale. By setting the ‘prudent Having regard to the Treaty establishing the European person’ rule as the underlying principle for capital Community, and in particular Article 47(2), Article 55 and investment and making it possible for institutions to operate across borders, the redirection of savings intothe sector of occupational retirement provision is Having regard to the proposal from the Commission (1), encouraged, thus contributing to economic and socialprogress.
Having regard to the opinion of the European Economic andSocial Committee (2), Acting in accordance with the procedure laid down in Article251 of the Treaty (3), The prudential rules laid down in this Directive areintended both to guarantee a high degree of security for future pensioners through the imposition of stringentsupervisory standards, and to clear the way for the effi- A genuine internal market for financial services is crucial cient management of occupational pension schemes.
for economic growth and job creation in the Com-munity.
Major achievements have already been made in theestablishment of this internal market, allowing financial Institutions which are completely separated from any institutions to operate in other Member States and sponsoring undertaking and which operate on a funded ensuring a high level of protection for the consumers of basis for the sole purpose of providing retirement bene- fits should have freedom to provide services andfreedom of investment, subject only to coordinated The communication from the Commission ‘Imple- prudential requirements, regardless of whether these menting the framework for financial markets: action institutions are considered as legal entities.
plan’ identifies a series of actions that are needed inorder to complete the internal market for financialservices, and the European Council, at its meeting inLisbon on 23 and 24 March 2000, called for the imple- In accordance with the principle of subsidiarity, Member mentation of this action plan by 2005.
States should retain full responsibility for the organisa-tion of their pension systems as well as for the decision The action plan for financial services stresses as an on the role of each of the three ‘pillars’ of the retirement urgent priority the need to draw up a directive on the system in individual Member States. In the context of prudential supervision of institutions for occupational the second pillar, they should also retain full responsi- retirement provision, as these institutions are major bility for the role and functions of the various institu- financial institutions which have a key role to play in tions providing occupational retirement benefits, such as ensuring the integration, efficiency and liquidity of the industry-wide pension funds, company pension funds financial markets, but they are not subject to a coherent and life-assurance companies. This Directive is not Community legislative framework allowing them to intended to call this prerogative into question.
benefit fully from the advantages of the internal market.
increasing pressure, occupational retirement pensionswill increasingly be relied on as a complement in future.
National rules concerning the participation of self- Occupational retirement pensions should therefore be employed persons in institutions for occupational retire- developed, without, however, calling into question the ment provision differ. In some Member States, institu- importance of social-security pension systems in terms tions for occupational retirement provision can operate of secure, durable and effective social protection, which on the basis of agreements with trade or trade groups should guarantee a decent standard of living in old age whose members act in a self-employed capacity or and should therefore be at the centre of the objective of directly with self-employed and employed persons. In strengthening the European social model.
some Member States a self-employed person can alsobecome a member of an institution when the self- employed person acts as employer or provides his professional services to an undertaking. In some Member (3) Opinion of the European Parliament of 4 July 2001 (OJ C 65 E, States self-employed persons cannot join an institution 14.3.2002, p. 135), Council common position of 5 November for occupational retirement provision unless certain 2002 (not yet published in the Official Journal) and decision of the European Parliament of 12 March 2003 (not yet published in the requirements, including those imposed by social and Official Journal) and decision of the Council of 13 May 2003.
Institutions managing social-security schemes, which are In order to protect members and beneficiaries, institu- already coordinated at Community level, should be tions for occupational retirement provision should limit excluded from the scope of this Directive. Account their activities to the activities, and those arising there- should nevertheless be taken of the specificity of institu- from, referred to in this Directive.
tions which, in a single Member State, manage bothsocial-security In the event of the bankruptcy of a sponsoring under-taking, a member faces the risk of losing both his/herjob and his/her acquired pension rights. This makes it Financial institutions which already benefit from a necessary to ensure that there is a clear separation Community legislative framework should in general be between that undertaking and the institution and that excluded from the scope of this Directive. However, as minimum prudential standards are laid down to protect these institutions may also in some cases offer occupa-tional pension services, it is important to ensure that this Directive does not lead to distortions of competition.
Such distortions may be avoided by applying theprudential requirements of this Directive to the occupa-tional pension business of life-assurance companies. The Commission should also carefully monitor the situation operate and are supervised with significant differences in in the occupational pensions market and assess the Member States. In some Member States, supervision can possibility of extending the optional application of this be exercised not only over the institution itself but also Directive to other regulated financial institutions.
over the entities or companies which are authorised tomanage these institutions. Member States should be ableto take such specificity into account as long as all therequirements laid down in this Directive are effectively When aiming at ensuring financial security in retire- met. Member States should also be able to allow insur- ment, the benefits paid by institutions for occupational ance entities and other financial entities to manage insti- retirement provision should generally provide for the tutions for occupational retirement provision.
payment of a lifelong pension. Payments for a temporaryperiod or a lump sum should also be possible.
Institutions for occupational retirement provision are It is important to ensure that older and disabled people financial service providers which bear a heavy responsi- are not placed at risk of poverty and can enjoy a decent bility for the provision of occupational retirement bene- standard of living. Appropriate cover for biometrical fits and therefore should meet certain minimum pruden- risks in occupational pension arrangements is an impor- tial standards with respect to their activities and condi- tant aspect of the fight against poverty and insecurity among elderly people. When setting up a pensionscheme, employers and employees, or their respectiverepresentatives, should consider the possibility of thepension scheme including provisions for the coverage ofthe longevity risk and occupational disability risks as The huge number of institutions in certain Member well as provision for surviving dependants.
States means a pragmatic solution is necessary as regardsprior authorisation of institutions. However, if an institu-tion wishes to manage a scheme in another MemberState, a prior authorisation granted by the competentauthority of the home Member State should be required.
Giving Member States the possibility to exclude from thescope of national implementing legislation institutionsmanaging schemes which together have less than 100members in total can facilitate supervision in someMember States, without undermining the proper func- Each Member State should require that every institution tioning of the internal market in this field. However, this located in its territory draw up annual accounts and should not undermine the right of such institutions to annual reports taking into account each pension scheme appoint for the management of their investment port- operated by the institution and, where applicable, annual folio and the custody of their assets investment accounts and annual reports for each pension scheme.
managers and custodians established in another Member The annual accounts and annual reports, reflecting a true and fair view of the institution's assets, liabilities andfinancial position, taking into account each pensionscheme operated by an institution, and duly approvedby an authorised person, are an essential source of infor- Institutions such as ‘Unterstützungskassen’ in Germany, mation for members and beneficiaries of a scheme and where the members have no legal rights to benefits of a the competent authorities. In particular, they enable the certain amount and where their interests are protected competent authorities to monitor the financial sound- by a compulsory statutory insolvency insurance, should ness of an institution and assess whether the institution be excluded from the scope of the Directive.
is able to meet all its contractual obligations.
Proper information for members and beneficiaries of a If the institution does not work on a cross-border basis, pension scheme is crucial. This is of particular relevance Member States should be able to permit underfunding for requests for information concerning the financial provided that a proper plan is established to restore full soundness of the institution, the contractual rules, the funding and without prejudice to the requirements of benefits and the actual financing of accrued pension Council Directive 80/987/EEC of 20 October 1980 on entitlements, the investment policy and the management the approximation of the laws of the Member States relating to the protection of employees in the event ofthe insolvency of their employer (1).
The investment policy of an institution is a decisivefactor for both security and affordability of occupational In many cases, it could be the sponsoring undertaking pensions. The institutions should therefore draw up and, and not the institution itself that either covers any at least every three years, review a statement of invest- biometric risk or guarantees certain benefits or invest- ment principles. It should be made available to the ment performance. However, in some cases, it is the competent authorities and on request also to members institution itself which provides such cover or guarantees and beneficiaries of each pension scheme.
and the sponsor's obligations are generally exhausted bypaying the necessary contributions. In these circum-stances, the products offered are similar to those of life-assurance companies and the institutions concernedshould hold at least the same additional own funds as To fulfil their statutory function, the competent authori- ties should be provided with adequate rights to informa-tion and powers of intervention with respect to institu-tions and the persons who effectively run them. Wherean institution for occupational retirement provision hastransferred functions of material importance such as Institutions are very long-term investors. Redemption of investment management, information technology or the assets held by these institutions cannot, in general, accounting to other companies (outsourcing), it should be made for any purpose other than providing retire- be possible for the rights to information and powers of ment benefits. Furthermore, in order to protect intervention to be enlarged so as to cover these adequately the rights of members and beneficiaries, insti- outsourced functions in order to check whether those tutions should be able to opt for an asset allocation that activities are carried out in accordance with the super- suits the precise nature and duration of their liabilities.
These aspects call for efficient supervision and anapproach towards investment rules allowing institutionssufficient flexibility to decide on the most secure andefficient investment policy and obliging them to act A prudent calculation of technical provisions is an essen- prudently. Compliance with the ‘prudent person’ rule tial condition to ensure that obligations to pay retire- therefore requires an investment policy geared to the ment benefits can be met. Technical provisions should membership structure of the individual institution for be calculated on the basis of recognised actuarial methods and certified by qualified persons. Themaximum interest rates should be chosen prudentlyaccording to any relevant national rules. The minimumamount of technical provisions should both be sufficientfor benefits already in payment to beneficiaries to Supervisory methods and practices vary among Member continue to be paid and reflect the commitments that States. Therefore, Member States should be given some arise out of members' accrued pension rights.
discretion on the precise investment rules that they wishto impose on the institutions located in their territories.
However, these rules must not restrict the free move-ment of capital, unless justified on prudential grounds.
Risks covered by institutions vary significantly from oneMember State to another. Home Member States shouldtherefore have the possibility of making the calculationof technical provisions subject to additional and more As very long-term investors with low liquidity risks, detailed rules than those laid down in this Directive.
institutions for occupational retirement provision are ina position to invest in non-liquid assets such as shares aswell as in risk capital markets within prudent limits.
They can also benefit from the advantages of interna-tional diversification. Investments in shares, risk capital Sufficient and appropriate assets to cover the technical markets and currencies other than those of the liabilities provisions protect the interests of members and benefici- should therefore not be restricted except on prudential aries of the pension scheme if the sponsoring under- taking becomes insolvent. In particular in cases of cross-border activity, the mutual recognition of supervisory (1) OJ L 283, 28.10.1980, p. 23. Directive as last amended by Directive principles applied in Member States requires that the 2002/74/EC of the European Parliament and of the Council (OJ L technical provisions be fully funded at all times.
However, if the institution works on a cross-border of views between national competent authorities, and to basis, it may be asked by the competent authorities of promote the consistent implementation of this Directive.
the host Member State to apply limits for investment inshares and similar assets not admitted to trading on aregulated market, in shares and other instruments issued Since the objective of the proposed action, namely to by the same undertaking or in assets denominated in create a Community legal framework covering institu- non-matching currencies provided such rules also apply tions for occupational retirement provision, cannot be to institutions located in the host Member State.
sufficiently achieved by the Member States and cantherefore, by reason of the scale and effects of the action,be better achieved by the Community, the Communitymay adopt measures, in accordance with the principle ofsubsidiarity as set out in Article 5 of the Treaty. In Restrictions regarding the free choice by institutions of accordance with the principle of proportionality as set approved asset managers and custodians limit competi- out in that Article, this Directive does not go beyond tion in the internal market and should therefore be what is necessary in order to achieve that objective, Without prejudice to national social and labour legisla- tion on the organisation of pension systems, includingcompulsory membership and the outcomes of collectivebargaining agreements, institutions should have thepossibility of providing their services in other MemberStates. They should be allowed to accept sponsorship from undertakings located in other Member States andto operate pension schemes with members in more thanone Member State. This would potentially lead to signifi- cant economies of scale for these institutions, improvethe competitiveness of the Community industry and This Directive lays down rules for the taking-up and pursuit of facilitate labour mobility. This requires mutual recogni- activities carried out by institutions for occupational retirement tion of prudential standards. Proper enforcement of these prudential standards should be supervised by the compe-tent authorities of the home Member State, unless speci-fied otherwise.
The exercise of the right of an institution in one Member State to manage an occupational pension schemecontracted in another Member State should fully respectthe provisions of the social and labour law in force in This Directive shall apply to institutions for occupational the host Member State insofar as it is relevant to occupa- retirement provision. Where, in accordance with national law, tional pensions, for example the definition and payment institutions for occupational retirement provision do not have of retirement benefits and the conditions for transfer- legal personality, Member States shall apply this Directive either to those institutions or, subject to paragraph 2, to thoseauthorised entities responsible for managing them and actingon their behalf.
When a scheme is ring-fenced, the provisions of this Directive apply individually to that scheme.
(a) institutions managing social-security schemes which are covered by Regulation (EEC) No 1408/71 (1) and Regulation(EEC) No 574/72 (2); It is important to make provision for cooperation (1) Council Regulation (EEC) No 1408/71 of 14 June 1971 on the between the competent authorities of the Member States application of social-security schemes to employed persons, to self- for supervisory purposes and between those authorities employed persons and to members of their families moving within and the Commission for other purposes. For the the Community (OJ L 149, 5.7.1971, p. 2). Regulation as last amended by Regulation (EC) No 1386/2001 of the European Parlia- purposes of carrying out their duties and of contributing ment and of the Council (OJ L 187, 10.7.2001, p. 1).
to the consistent and timely implementation of this (2) Council Regulation (EEC) No 574/72 of 21 March 1972 fixing the Directive, competent authorities should provide each procedure for implementing Regulation (EEC) No 1408/71 on the other with the information necessary to apply the provi- application of social-security schemes to employed persons, to self- sions of the Directive. The Commission has indicated its employed persons and to members of their families moving within the Community (OJ L 74, 27.3.1972, p. 1). Regulation as last intention to set up a committee of supervisors in order amended by Commission Regulation (EC) No 410/2002 (OJ L 62, to encourage cooperation, coordination and exchanges (b) institutions which are covered by Directive 73/239/EEC (1), The home Member State shall ensure that either the competent Directive 85/611/EEC (2), Directive 93/22/EEC (3), Directive authorities, or the authorities responsible for supervision of 2000/12/EC (4) and Directive 2002/83/EC (5); insurance undertakings covered by Directive 2002/83/EC, aspart of their supervisory work, verify the strict separation of (c) institutions which operate on a pay-as-you-go basis; the relevant occupational retirement provision business.
(d) institutions where employees of the sponsoring undertak- ings have no legal rights to benefits and where the spon-soring undertaking can redeem the assets at any time andnot necessarily meet its obligations for payment of retire-ment benefits; (e) companies using book-reserve schemes with a view to paying out retirement benefits to their employees.
Small pension institutions and statutory schemes
With the exception of Article 19, Member States may choose Application
institutions
operating
social-security
not to apply this Directive, in whole or in part, to any institu- tion located in their territories which operates pension schemeswhich together have less than 100 members in total. Subject to Institutions for occupational retirement provision which also Article 2(2), such institutions should nevertheless be given the operate compulsory employment-related pension schemes right to apply this Directive on a voluntary basis. Article 20 which are considered to be social-security schemes covered by may be applied only if all the other provisions of this Directive Regulations (EEC) No 1408/71 and (EEC) No 574/72 shall be covered by this Directive in respect of their non-compulsoryoccupational retirement provision business. In that case, theliabilities and the corresponding assets shall be ring-fenced and Member States may choose not to apply Articles 9 to 17 to it shall not be possible to transfer them to the compulsory institutions where occupational retirement provision is made pension schemes which are considered as social-security under statute, pursuant to legislation, and is guaranteed by a public authority. Article 20 may be applied only if all the otherprovisions of this Directive apply.
Optional application to institutions covered by Directive
2002/83/EC
Home Member States may choose to apply the provisions ofArticles 9 to 16 and Articles 18 to 20 of this Directive to theoccupational-retirement-provision business of insurance under- Definitions
takings which are covered by Directive 2002/83/EC. In thatcase, all assets and liabilities corresponding to the said businessshall be ring-fenced, managed and organised separately from the other activities of the insurance undertakings, without anypossibility of transfer.
(a) ‘institution for occupational retirement provision’, or ‘insti- In such case, and only as far as their occupational retirement tution’, means an institution, irrespective of its legal form, provision business is concerned, insurance undertakings shall operating on a funded basis, established separately from not be subject to Articles 20 to 26, 31 and 36 of Directive any sponsoring undertaking or trade for the purpose of providing retirement benefits in the context of an occupa-tional activity on the basis of an agreement or a contractagreed: (1) First Council Directive 73/239/EEC of 24 July 1973 on the coordi- nation of laws, regulations and administrative provisions relating to — individually or collectively between the employer(s) and the taking-up and pursuit of the business of direct insurance other the employee(s) or their respective representatives, or than life assurance (OJ L 228, 16.8.1973, p. 3). Directive as last amended by Directive 2002/13/EC of the European Parliament and — with self-employed persons, in compliance with the of the Council (OJ L 77, 20.3.2002, p. 17).
(2) Council Directive 85/611/EEC of 20 December 1985 on the coordi- legislation of the home and host Member States, nation of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities and which carries out activities directly arising therefrom; (UCITS) (OJ L 375, 31.12.1985, p. 3). Directive as last amended by Directive 2001/108/EC of the European Parliament and of the Council (OJ L 41, 13.2.2002, p. 35).
(b) ‘pension scheme’ means a contract, an agreement, a trust (3) Council Directive 93/22/EEC of 10 May 1993 on investment deed or rules stipulating which retirement benefits are services in the securities field (OJ L 141, 11.6.1993, p. 27). Direc- tive as last amended by Directive 2000/64/EC of the European Parliament and of the Council (OJ L 290, 17.11.2000, p. 27).
(4) Directive 2000/12/EC of the European Parliament and of the Council of 20 March 2000 relating to the taking-up and pursuit of (c) ‘sponsoring undertaking’ means any undertaking or other the business of credit institutions (OJ L 126, 26.5.2000, p. 1). Direc- body, regardless of whether it includes or consists of one or tive as amended by Directive 2000/28/EC (OJ L 275, 27.10.2000, more legal or natural persons, which acts as an employer or in a self-employed capacity or any combination thereof (5) Directive 2002/83/EC of the European Parliament and of the Council of 5 November 2002 concerning life assurance (OJ L 345, and which pays contributions into an institution for occu- (d) ‘retirement benefits’ means benefits paid by reference to reaching, or the expectation of reaching, retirement or,where they are supplementary to those benefits andprovided on an ancillary basis, in the form of payments on Conditions of operation
death, disability, or cessation of employment or in the formof support payments or services in case of sickness, indi-gence or death. In order to facilitate financial security in Each Member State shall, in respect of every institution retirement, these benefits usually take the form of payments for life. They may, however, also be payments made for atemporary period or as a lump sum.
(a) the institution is registered in a national register by the competent supervisory authority or authorised; in the case (e) ‘member’ means a person whose occupational activities of cross-border activities referred to in Article 20, the entitle or will entitle him/her to retirement benefits in register shall also indicate the Member States in which the accordance with the provisions of a pension scheme; (f) ‘beneficiary’ means a person receiving retirement benefits; (b) the institution is effectively run by persons of good repute who must themselves have appropriate professional qualifi- (g) ‘competent authorities’ means the national authorities cations and experience or employ advisers with appropriate designated to carry out the duties provided for in this professional qualifications and experience; (c) properly constituted rules regarding the functioning of any (h) ‘biometrical risks’ mean risks linked to death, disability and pension scheme operated by the institution have beenimplemented and members have been adequately informedof these rules; (i) ‘home Member State’ means the Member State in which the institution has its registered office and its main administra-tion or, if it does not have a registered office, its main (d) all technical provisions are computed and certified by an actuary or, if not by an actuary, by another specialist in thisfield, including an auditor, according to national legislation, (j) ‘host Member State’ means the Member State whose social on the basis of actuarial methods recognised by the compe- and labour law relevant to the field of occupational pension tent authorities of the home Member State; schemes is applicable to the relationship between the spon-soring undertaking and members.
(e) where the sponsoring undertaking guarantees the payment of the retirement benefits, it is committed to regular finan-cing; (f) the members are sufficiently informed of the conditions of the pension scheme, in particular concerning: Activities of an institution
(i) the rights and obligations of the parties involved in the Each Member State shall require institutions located within its (ii) the financial, technical and other risks associated with territory to limit their activities to retirement-benefit related operations and activities arising therefrom.
(iii) the nature and distribution of those risks.
When, in accordance with Article 4, an insurance undertakingmanages its occupational retirement provision business by In accordance with the principle of subsidiarity and ring-fencing its assets and liabilities, the ring-fenced assets and taking due account of the scale of pension benefits offered by liabilities shall be restricted to retirement-benefit related opera- the social-security regimes, Member States may provide that tions and activities directly arising therefrom.
the option of longevity and disability cover, provision forsurviving dependants and a guarantee of repayment of contri-butions as additional benefits be offered to members ifemployers and employees, or their respective representatives,so agree.
Legal separation between sponsoring undertakings and
A Member State may make the conditions of operation of institutions for occupational retirement provision
an institution located in its territory subject to other require-ments, with a view to ensuring that the interests of membersand beneficiaries are adequately protected.
Each Member State shall ensure that there is a legal separationbetween a sponsoring undertaking and an institution for occu-pational retirement provision in order that the assets of the A Member State may permit or require institutions institution are safeguarded in the interests of members and located in its territory to entrust management of these institu- beneficiaries in the event of bankruptcy of the sponsoring tions, in whole or in part, to other entities operating on behalf In the case of cross-border activity as referred to in Each beneficiary shall receive, on retirement or when Article 20, the conditions of operation of the institution shall other benefits become due, the appropriate information on the be subject to a prior authorisation by the competent authorities benefits which are due and the corresponding payment Annual accounts and annual reports
Statement of investment policy principles
Each Member State shall require that every institution locatedin its territory draw up annual accounts and annual reportstaking into account each pension scheme operated by the insti- Each Member State shall ensure that every institution located in tution and, where applicable, annual accounts and annual its territory prepares and, at least every three years, reviews awritten statement of investment-policy principles. This state- reports for each pension scheme. The annual accounts and the ment is to be revised without delay after any significant change annual reports shall give a true and fair view of the institution'sassets, liabilities and financial position. The annual accounts in the investment policy. Member States shall provide that this and information in the reports shall be consistent, comprehen- statement contains, at least, such matters as the investment risk sive, fairly presented and duly approved by authorised persons, measurement methods, the risk-management processes imple- mented and the strategic asset allocation with respect to thenature and duration of pension liabilities.
Information to be given to the members and beneficiaries
Information to be provided to the competent authorities
Depending on the nature of the pension scheme estab- lished, each Member State shall ensure that every institutionlocated in its territory provides at least the information set out Each Member State shall ensure that the competent authorities, in respect of any institution located in its territory, have thenecessary powers and means: Members and beneficiaries and/or, where applicable, their (a) to require the institution, the members of its board of direc- tors and other managers or directors or persons controlling (a) on request, the annual accounts and the annual reports the institution to supply information about all business referred to in Article 10, and, where an institution is matters or forward all business documents; responsible for more than one scheme, those relating totheir particular pension scheme; (b) to supervise relationships between the institution and other companies or between institutions, when institutions (b) within a reasonable time, any relevant information transfer functions to those other companies or institutions regarding changes to the pension-scheme rules.
(outsourcing), influencing the financial situation of theinstitution or being in a material way relevant for effective The statement of investment policy principles, referred to in Article 12, shall be made available to members and benefici-aries and/or, where applicable, to their representatives on (c) to obtain regularly the statement of investment-policy prin- ciples, the annual accounts and the annual reports, and allthe documents necessary for the purposes of supervision.
Each member shall also receive, on request, detailed and (a) the target level of the retirement benefits, if applicable; (ii) actuarial valuations and detailed assumptions; (b) the level of benefits in case of cessation of employment; (iv) evidence of consistency with the investment-policy (c) where the member bears the investment risk, the range of investment options, if applicable, and the actual investmentportfolio as well as information on risk exposure and costs (v) evidence that contributions have been paid in as (d) the arrangements relating to the transfer of pension rights (vi) reports by the persons responsible for auditing the to another institution for occupational retirement provision annual accounts referred to in Article 10; in the event of termination of the employment relationship.
(d) to carry out on-site inspections at the institution's premises Members shall receive every year brief particulars of the and, where appropriate, on outsourced functions to check situation of the institution as well as the current level of if activities are carried out in accordance with the super- financing of their accrued individual entitlements.
Powers of intervention and duties of the competent
Technical provisions
authorities
The competent authorities shall require every institution The home Member State shall ensure that institutions located in their territories to have sound administrative and operating occupational pension schemes establish at all times accounting procedures and adequate internal control mechan- in respect of the total range of their pension schemes an adequate amount of liabilities corresponding to the financialcommitments which arise out of their portfolio of existingpension contracts.
The competent authorities shall have the power to take any measures including, where appropriate, those of an admin-istrative or financial nature, either with regard to any institu- The home Member State shall ensure that institutions tion located in their territories or against the persons running operating occupational pension schemes, where they provide the institution, which are appropriate and necessary to prevent cover against biometric risks and/or guarantee either an invest- or remedy any irregularities prejudicial to the interests of the ment performance or a given level of benefits, establish suffi- cient technical provisions in respect of the total range of theseschemes.
They may also restrict or prohibit the free disposal of the insti-tution's assets when, in particular: The calculation of technical provisions shall take place every year. However, the home Member State may allow a (a) the institution has failed to establish sufficient technical calculation once every three years if the institution provides provisions in respect of the entire business or has insuffi- members and/or the competent authorities with a certification cient assets to cover the technical provisions; or a report of adjustments for the intervening years. The certifi-cation or the report shall reflect the adjusted development of (b) the institution has failed to hold the regulatory own funds.
the technical provisions and changes in risks covered.
In order to safeguard the interests of members and benefi- ciaries, the competent authorities may transfer the powers The calculation of the technical provisions shall be which the persons running an institution located in their terri- executed and certified by an actuary or, if not by an actuary, by tories hold in accordance with the law of the home Member another specialist in this field, including an auditor, according State wholly or partly to a special representative who is fit to to national legislation, on the basis of actuarial methods recog- nised by the competent authorities of the home Member State,according to the following principles: The competent authorities may prohibit or restrict the (a) the minimum amount of the technical provisions shall be activities of an institution located in their territories in parti- calculated by a sufficiently prudent actuarial valuation, taking account of all commitments for benefits and forcontributions in accordance with the pension arrangements (a) the institution fails to protect adequately the interests of of the institution. It must be sufficient both for pensions and benefits already in payment to beneficiaries to continueto be paid, and to reflect the commitments which arise out (b) the institution no longer fulfils the conditions of operation; of members' accrued pension rights. The economic andactuarial assumptions chosen for the valuation of the liabil-ities shall also be chosen prudently taking account, if (c) the institution fails seriously in its obligations under the applicable, of an appropriate margin for adverse deviation; (d) in the case of cross-border activity, the institution does not (b) the maximum rates of interest used shall be chosen respect the requirements of social and labour law of the prudently and determined in accordance with any relevant host Member State relevant to the field of occupational rules of the home Member State. These prudent rates of interest shall be determined by taking into account: — the yield on the corresponding assets held by the insti- Any decision to prohibit the activities of an institution shall be tution and the future investment returns and/or supported by precise reasons and notified to the institution in — the market yields of high-quality or government bonds; (c) the biometric tables used for the calculation of technical Member States shall ensure that decisions taken in respect provisions shall be based on prudent principles, having of an institution under laws, regulations and administrative regard to the main characteristics of the group of members provisions adopted in accordance with this Directive are subject and the pension schemes, in particular the expected to the right to apply to the courts.
(d) the method and basis of calculation of technical provisions Member State. The institution shall establish a procedure in shall in general remain constant from one financial year to order to transfer the assets and the corresponding liabilities another. However, discontinuities may be justified by a to another financial institution or a similar body. This change of legal, demographic or economic circumstances procedure shall be disclosed to the competent authorities of the home Member State and a general outline of the proce-dure shall be made available to members or, where applic-able, to their representatives in accordance with the prin- The home Member State may make the calculation of technical provisions subject to additional and more detailedrequirements, with a view to ensuring that the interests ofmembers and beneficiaries are adequately protected.
In the event of cross-border activity as referred to in Article 20, the technical provisions shall at all times be fullyfunded in respect of the total range of pension schemes oper- With a view to further harmonisation of the rules ated. If these conditions are not met, the competent authorities regarding the calculation of technical provisions which may be of the home Member State shall intervene in accordance with justified — in particular the interest rates and other assump- Article 14. To comply with this requirement the home Member tions influencing the level of technical provisions — the State may require ring-fencing of the assets and liabilities.
Commission shall, every two years or at the request of aMember State, issue a report on the situation concerning thedevelopment in cross-border activities.
The Commission shall propose any necessary measures toprevent possible distortions caused by different levels of interestrates and to protect the interest of beneficiaries and members Regulatory own funds
The home Member State shall ensure that institutions operating pension schemes, where the institution itself, and notthe sponsoring undertaking, underwrites the liability to cover against biometric risk, or guarantees a given investment perfor-mance or a given level of benefits, hold on a permanent basisadditional assets above the technical provisions to serve as a Funding of technical provisions
buffer. The amount thereof shall reflect the type of risk andasset base in respect of the total range of schemes operated.
These assets shall be free of all foreseeable liabilities and serve The home Member State shall require every institution to as a safety capital to absorb discrepancies between the antici- have at all times sufficient and appropriate assets to cover the pated and the actual expenses and profits.
technical provisions in respect of the total range of pensionschemes operated.
For the purposes of calculating the minimum amount of the additional assets, the rules laid down in Articles 27 and 28 The home Member State may allow an institution, for a of Directive 2002/83/EC shall apply.
limited period of time, to have insufficient assets to cover thetechnical provisions. In this case the competent authorities shallrequire the institution to adopt a concrete and realisable Paragraph 1 shall, however, not prevent Member States recovery plan in order to ensure that the requirements of para- from requiring institutions located in their territory to hold graph 1 are met again. The plan shall be subject to the regulatory own funds or from laying down more detailed rules provided that they are prudentially justified.
(a) the institution shall set up a concrete and realisable plan to re-establish the required amount of assets to cover fully thetechnical provisions in due time. The plan shall be made available to members or, where applicable, to their repre-sentatives and/or shall be subject to approval by thecompetent authorities of the home Member State; Investment rules
(b) in drawing up the plan, account shall be taken of the specific situation of the institution, in particular the asset/ Member States shall require institutions located in their liability structure, risk profile, liquidity plan, the age profile territories to invest in accordance with the ‘prudent person’ rule of the members entitled to receive retirement benefits, and in particular in accordance with the following rules: start-up schemes and schemes changing from non-fundingor partial funding to full funding; (a) the assets shall be invested in the best interests of members and beneficiaries. In the case of a potential conflict of (c) in the event of termination of a pension scheme during the interest, the institution, or the entity which manages its period referred to above in this paragraph, the institution portfolio, shall ensure that the investment is made in the shall inform the competent authorities of the home sole interest of members and beneficiaries; (b) the assets shall be invested in such a manner as to ensure In accordance with the provisions of paragraphs 1 to 4, the security, quality, liquidity and profitability of the port- Member States may, for the institutions located in their terri- tories, lay down more detailed rules, including quantitativerules, provided they are prudentially justified, to reflect the totalrange of pension schemes operated by these institutions.
Assets held to cover the technical provisions shall also beinvested in a manner appropriate to the nature and dura-tion of the expected future retirement benefits; In particular, Member States may apply investment provisionssimilar to those of Directive 2002/83/EC.
(c) the assets shall be predominantly invested on regulated markets. Investment in assets which are not admitted totrading on a regulated financial market must in any event However, Member States shall not prevent institutions from: (a) investing up to 70 % of the assets covering the technical provisions or of the whole portfolio for schemes in which (d) investment in derivative instruments shall be possible the members bear the investment risks in shares, negotiable insofar as they contribute to a reduction of investment risks securities treated as shares and corporate bonds admitted to or facilitate efficient portfolio management. They must be trading on regulated markets and deciding on the relative valued on a prudent basis, taking into account the under- weight of these securities in their investment portfolio.
lying asset, and included in the valuation of the institution's Provided it is prudentially justified, Member States may, assets. The institution shall also avoid excessive risk expo- however, apply a lower limit to institutions which provide sure to a single counterparty and to other derivative opera- retirement products with a long-term interest rate guar- antee, bear the investment risk and themselves provide forthe guarantee; (e) the assets shall be properly diversified in such a way as to avoid excessive reliance on any particular asset, issuer or (b) investing up to 30 % of the assets covering technical provi- group of undertakings and accumulations of risk in the sions in assets denominated in currencies other than those Investments in assets issued by the same issuer or by issuers (c) investing in risk capital markets.
belonging to the same group shall not expose the institu-tion to excessive risk concentration; Paragraph 5 shall not preclude the right for Member States to require the application to institutions located in their (f) investment in the sponsoring undertaking shall be no more territory of more stringent investment rules also on an indivi- than 5 % of the portfolio as a whole and, when the spon- dual basis provided they are prudentially justified, in particular soring undertaking belongs to a group, investment in the in the light of the liabilities entered into by the institution.
undertakings belonging to the same group as the spon-soring undertaking shall not be more than 10 % of theportfolio.
In the event of cross-border activity as referred in Article 20, the competent authorities of each host Member State may When the institution is sponsored by a number of under- require that the rules set out in the second subparagraph apply takings, investment in these sponsoring undertakings shall to the institution in the home Member State. In such case, these be made prudently, taking into account the need for proper rules shall apply only to the part of the assets of the institution that corresponds to the activities carried out in the particularhost Member State. Furthermore, they shall only be applied ifthe same or stricter rules also apply to institutions located inthe host Member State.
Member States may decide not to apply the requirementsreferred to in points (e) and (f) to investment in governmentbonds.
The rules referred to in the first subparagraph are as follows: (a) the institution shall not invest more than 30 % of these The home Member State shall prohibit the institution assets in shares, other securities treated as shares and debt from borrowing or acting as a guarantor on behalf of third securities which are not admitted to trading on a regulated parties. However, Member States may authorise institutions to market, or the institution shall invest at least 70 % of these carry out some borrowing only for liquidity purposes and on a assets in shares, other securities treated as shares, and debt securities which are admitted to trading on a regulatedmarket; Member States shall not require institutions located in (b) the institution shall invest no more than 5 % of these assets their territory to invest in particular categories of assets.
in shares and other securities treated as shares, bonds, debtsecurities and other money and capital-market instrumentsissued by the same undertaking and no more than 10 % of Without prejudice to Article 12, Member States shall not these assets in shares and other securities treated as shares, subject the investment decisions of an institution located in bonds, debt securities and other money and capital market their territory or its investment manager to any kind of prior instruments issued by undertakings belonging to a single approval or systematic notification requirements.
(c) the institution shall not invest more than 30 % of these (b) the name of the sponsoring undertaking; assets in assets denominated in currencies other than thosein which the liabilities are expressed.
(c) the main characteristics of the pension scheme to be oper- To comply with these requirements, the home Member State ated for the sponsoring undertaking.
may require ring-fencing of the assets.
Where a competent authority of the home Member State is notified under paragraph 2, and unless it has reason to doubt Management and custody
that the administrative structure or the financial situation ofthe institution or the good repute and professional qualifica-tions or experience of the persons running the institution are Member States shall not restrict institutions from compatible with the operations proposed in the host Member appointing, for the management of the investment portfolio, State, it shall within three months of receiving all the informa- investment managers established in another Member State and tion referred to in paragraph 3 communicate that information duly authorised for this activity, in accordance with Directives to the competent authorities of the host Member State and 85/611/EEC, 93/22/EEC, 2000/12/EC and 2002/83/EC, as well as those referred to in Article 2(1) of this Directive.
Member States shall not restrict institutions from appointing, for the custody of their assets, custodians estab- Before the institution starts to operate a pension scheme lished in another Member State and duly authorised in accor- for a sponsoring undertaking in another Member State, the dance with Directive 93/22/EEC or Directive 2000/12/EC, or competent authorities of the host Member State shall, within accepted as a depositary for the purposes of Directive 85/611/ two months of receiving the information referred to in para- graph 3, inform the competent authorities of the homeMember State, if appropriate, of the requirements of social and The provision referred to in this paragraph shall not prevent labour law relevant to the field of occupational pensions under the home Member State from making the appointment of a which the pension scheme sponsored by an undertaking in the depositary or a custodian compulsory.
host Member State must be operated and any rules that are tobe applied in accordance with Article 18(7) and with paragraph Each Member State shall take the necessary steps to 7 of this Article. The competent authorities of the home enable it under its national law to prohibit, in accordance with Member State shall communicate this information to the insti- Article 14, the free disposal of assets held by a depositary or custodian located within its territory at the request of the insti-tution's home Member State.
On receiving the communication referred to in paragraph 5, or if no communication is received from the competentauthorities of the home Member State on expiry of the period Cross-border activities
provided for in paragraph 5, the institution may start tooperate the pension scheme sponsored by an undertaking in Without prejudice to national social and labour legislation the host Member State in accordance with the host Member on the organisation of pension systems, including compulsory State's requirements of social and labour law relevant to the membership and the outcomes of collective bargaining agree- field of occupational pensions, and any rules that are to be ments, Member States shall allow undertakings located within applied in accordance with Article 18(7) and with paragraph 7 their territories to sponsor institutions for occupational retire- ment provision authorised in other Member States. They shallalso allow institutions for occupational retirement provisionauthorised in their territories to accept sponsorship by under-takings located within the territories of other Member States.
In particular, an institution sponsored by an undertaking located in another Member State shall also be subject, in An institution wishing to accept sponsorship from a respect of the corresponding members, to any information sponsoring undertaking located within the territory of another requirements imposed by the competent authorities of the host Member State shall be subject to a prior authorisation by the Member State on institutions located in that Member State, in competent authorities of its home Member State, as referred to in Article 9(5). It shall notify its intention to accept sponsorshipfrom a sponsoring undertaking located within the territory ofanother Member State to the competent authorities of thehome Member State where it is authorised.
The competent authorities of the host Member State shall inform the competent authorities of the home Member State of Member States shall require institutions located within any significant change in the host Member State's requirements their territories and proposing to be sponsored by an under- of social and labour law relevant to the field of occupational taking located in the territory of another Member State to pension schemes which may affect the characteristics of the provide the following information when effecting a notification pension scheme insofar as it concerns the operation of the pension scheme sponsored by an undertaking in the hostMember State and in any rules that have to be applied in accor- dance with Article 18(7) and with paragraph 7 of this Article.
The institution shall be subject to ongoing supervision by The competent authorities of the host Member State may the competent authorities of the host Member State as to the ask the competent authorities of the home Member State to compliance of its activities with the host Member State's decide on the ring-fencing of the institution's assets and liabil- requirements of labour and social law relevant to the field of ities, as provided for in Article 16(3) and Article 18(7).
occupational pension schemes referred to in paragraph 5 andwith the information requirements referred to in paragraph 7.
Should this supervision bring irregularities to light, the compe-tent authorities of the host Member State shall inform the Implementation
competent authorities of the home Member State immediately.
The competent authorities of the home Member State shall, in Member States shall bring into force the laws, regulations coordination with the competent authorities of the host and administrative provisions necessary to comply with this Member State, take the necessary measures to ensure that the Directive before 23 September 2005. They shall forthwith institution puts a stop to the detected breach of social and When Member States adopt these measures, they shall contain If, despite the measures taken by the competent authori- a reference to this Directive or shall be accompanied by such ties of the home Member State or because appropriate reference on the occasion of their official publication. The measures are lacking in the home Member State, the institution methods of making such reference shall be laid down by persists in breaching the applicable provisions of the host Member State's requirements of social and labour law relevant Member States shall communicate to the Commission the to the field of occupational pension schemes, the competent text of the main provisions of national law which they adopt in authorities of the host Member State may, after informing the the field governed by this Directive.
competent authorities of the home Member State, take appro-priate measures to prevent or penalise further irregularities, Member States may postpone until 23 September 2010 including, insofar as is strictly necessary, preventing the institu- the application of Article 17(1) and (2) to institutions located tion from operating in the host Member State for the spon- in their territory which at the date specified in paragraph 1 of this Article do not have the minimum level of regulatory ownfunds required pursuant to Article 17(1) and (2). However, institutions wishing to operate pension schemes on a cross-border basis, within the meaning of Article 20, may not do so Cooperation between Member States and the Commission
until they comply with the rules of this Directive.
Member States shall ensure, in an appropriate manner, Member States may postpone until 23 September 2010 the uniform application of this Directive through regular the application of Article 18(1)(f) to institutions located in their exchanges of information and experience with a view to devel- territory. However, institutions wishing to operate pension oping best practices in this sphere and closer cooperation, and schemes on a cross-border basis, within the meaning of Article by so doing, preventing distortions of competition and creating 20, may not do so until they comply with the rules of this The Commission and the competent authorities of the Member States shall collaborate closely with a view to facili-tating supervision of the operations of institutions for occupa- Entry in force
This Directive shall enter into force on the day of its publica- Each Member State shall inform the Commission of any tion in the Official Journal of the European Union.
major difficulties to which the application of this Directivegives rise.
The Commission and the competent authorities of the Member Addressees
States concerned shall examine such difficulties as quickly aspossible in order to find an appropriate solution.
This Directive is addressed to the Member States.
Four years after the entry into force of this Directive, the Commission shall issue a report reviewing: (a) the application of Article 18 and the progress achieved in the adaptation of national supervisory systems, and (b) the application of the second subparagraph of Article 19(2), in particular the situation prevailing in MemberStates regarding the use of depositaries and the role played

Source: http://amf.gov.al/pdf/ligje/18_Directive%202003.pdf

Eftba_eu_juni 2012

EFTBA UPDATE – June 2012 EFTBA Activity The EFTBA AGM on the 13th May was well attended in the magnificent location of Longchamp racecourse in Paris. Many issues of current concern and relevance were debated and the packed AGM agenda was followed by racing in the afternoon including a prize giving to Dietrich von Boetticher from Germany as the 2012 EFTBA award winner. Following the AGM m

Microsoft word - psychotherapeutic_review.doc

Second Meeting of the Subcommittee of the Expert Committee on the Selection and Use of Essential Medicines WHO essential drugs for common Psychiatric disorders in children. 1. Anxiety disorders- 2. Depression 3. Bipolar disorder 4. Attention Deficit Hyperactivity disorder 4. Tourette’s syndrome 5. Enuresis 6. Psychotic disorders 1. Anxiety disorders: SSRIs are the medication

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