Title: IOPS Principles of private pension supervision
1IOPS Principles of private pension supervision
- John Ashcroft
- President, IOPS
- Head of Strategy, UK Pensions Regulator
- Supervision of Pension Systems
- Current Trends and Issues
- Warsaw 17-19 September 2006
2IOPS principles of private pension supervision
- What is IOPS
- What IOPS is doing
- The diversity of pension supervision
- The common core principles
3What 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.
4IOPS 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
5Programme 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
6Programme of WorkOn-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
7Cooperation with other organisations
- Partnership agreements
- OECD
- ISSA
- IAIS (pending)
- Associate Members and Observers
- IAA
- IMF
- World Bank
- Cooperation with regional supervisory bodies
- AIOS
- CEIOPS
8Conference 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)
92006/ 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
- IOPS committee meetings AGM, OECD/ IOPS
Pensions Global Forum - Annual fees
- 7,500 5,000 2,500
- www.iopsweb.org
10Diversity 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
11Pension supervision structures are diverse
- Relationship with pensions regulation
- Distance from Government
- Unitary or combined supervisors
12Diversity Pension Supervisory Structures
13There 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
14But 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
15IOPS 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
16IOPS 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 7Consultation 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