This article summarizes key regulatory issues in selective European countries – Denmark, Germany, The Netherlands, Sweden, Switzerland and UK.
Denmark has had a Financial Business Act (Lov om Finansiel Virksomhed) which regulates banks, insurers, investment managers and other financial institutions. However, it has become clear that the legislation makes it difficult to work out which rules pertain to which business. Moreover, rules which should relate only to banks, often affect insurers and other financial businesses covered by the same regulation. A consensus has been reached to seperate the insurance regulation from the Financial Business Act, into an insurance act.
Germany - In January, the ministry of health issued a draft bill to abolish the contributions representing the notional employer’s share. This includes raising the tax grant (from the general fiscal budget) by €2.5bn and lowering the liquidity reserve requirements of statutory health insurance schemes. Since January, the Occupational Pensions Strengthening Act (BRSG) has required some employers to increase employee-financed contributions to external pension providers by 15%, since these contributions save the employer social insurance contributions. However, this depends on circumstances. The increase is limited to the actual amount saved by the employer. However, collective bargaining agreements (Tarifverträge) may provide for a smaller increase, or no increase at all. For existing wage agreements (there is some debate as to which agreements are included), the obligation comes into effect in January 2022.
The Netherlands - A law covering miscellaneous pension matters was adopted by the upper house last December, and came into force in January. It covers: the automatic value transfer and surrender of very small pensions; data delivery to De Nederlandsche Bank; bridging pensions; employee participation in small businesses; premium payments based on actual monthly amounts paid to employees and not estimates. Furthermore, this collective law spells out explicitly that a pension fund board is always responsible for asset management, even where it is outsourced. New legislation covering the consent of participants involved in a collective value transfer to a cross-border pension administrator was approved in 2018 by both parliamentary chambers.
Sweden - Insurance companies and friendly societies offering pensions will have to change their legal status to an occupational pensions company, offering only occupational pensions. They will be subject to regulation based on IORP II, but with additional risk-based capital requirements. The regulation has been delayed, but will take effect on the same date as the IORP II legislation.
Switzerland - In 2017, a referendum rejected plans to reform the first and second pillars of the pension system to make them sustainable. The government has now decided to seperate the two reforms.
UK - Draft regulations scheduled to come into effect the day the UK leaves the European Union (29 March 2019) make amendments to UK pensions legislation. These are not intended to change policy, but to ensure that after Brexit, legislation continues to make sense and work effectively. As part of this, regulations on cross-border pension schemes will be revoked. If Brexit is deferred, the date when the regulations take effect will be changed accordingly.
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