OECD principles of occupational pension regulation [electronic resource] : methodology for assessment and implementation implementation

2010·2.8 MB·English

by  Organisation for Economic Co-operation and Development

OECD
Principles
ofOccupational
Pension Regulation
METHODOLOGYFORASSESSMENT
ANDIMPLEMENTATION
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OECD
Copyrightedmaterial
Copyrightedmaterial
OECD
Principles of
Occupational Pension
Regulation
METHODOLOGYFORASSESSMENTAND
IMPLEMENTATION
m
OECD
Copyrightedi
ORGANISATIONFORECONOMICCO-OPERATION
ANDDEVELOPMENT
TheOECDisauniqueforumwheregovernmentsworktogethertoaddresstheeconomic,
socialandenvironmentalchallengesofglobalisation.TheOECDisalsoattheforefrontofefforts
tounderstandandtohelpgovernmentsrespondtonewdevelopmentsandconcerns,suchas
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answerstocommonproblems,identifygoodpracticeandworktoco-ordinatedomesticand
internationalpolicies.
TheOECDmembercountriesare:Australia,Austria,Belgium,Canada,Chile,the
CzechRepublic,Denmark,Finland,France,Germany,Greece,Hungary,Iceland,Ireland,Italy,
Japan,Korea,Luxembourg,Mexico,theNetherlands,NewZealand,Norway,Poland,Portugal,the
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expressedandargumentsemployedhereindonotnecessarilyreflecttheofficialviewsofthe
Organisationorofthegovernmentsofitsmembercountries.
ISBN978-92-64-08635-7(print)
ISBN978-92-64-08709-5(PDF)
A1’lesuoaluaavtaiiolnaebtlelaimnisFereenncohe:uvrPerincipesdeI’OCDEsurlareglementationdespensionsprofessionnelles:Methodologiepour
CorrigendatoOECDpublicationsmaybefoundonlineat:www.oecd.org/publishing/corrigenda.
©OECD2010
Ydaotuabcaasnescoapnyd,mduolwtnilmoeaddiaorprpordiuncttsOEinCDyocuornotewnntdfoorcuymoeunrtso,wpnreusseen,taatnidonys,oublcogasn,iwnecblsuidteesexacnedrpttesacfhrionmgmOaEtCerDiaplusb,lipcraotviiodnesd,
thatsuitableacknowledgmentofOECDassourceandcopyrightownerisgiven.Allrequestsforpublicorcommercialuseand
tpruabnlsilcaotrioc[e-mail]paerramnicsesCieonntteorp(hCCoCt)[email protected]
frangaisd’exploitationdudroitdecopie(CFC)[email protected].
3
Foreword
Occupational pensions play a major role in OECD countries and
worldwide,complementingretirementincomefromstatesources.Attheend
of2009,privatepensionsavingsreachedUSD25trillion.Populationageing
hasledmanyOECDcountriestoundertakeawiderangeofpensionreforms
-theoveralleffectofwhichhasbeentoreducepublicpensionpromises
and, inturn,toincreasetheimportanceofprivatepensionsavingsfor
retirement.
Efficient regulation, strong governance and oversight of pension
schemesareneededtoensurethattoday’semployeeswillenjoysecureand
adequateretirementpensionstomorrow.OECDgovernmentshaveagreed
onsevenCorePrinciplesofOccupationalPensionRegulationtoassistin
meetingthisobjective. TheCorePrincipleswereoriginallydevelopedby
theOECD'sWorkingPartyonPrivatePensionsandwereapprovedbythe
OECDCouncilinJune2009.
The Methodology for Assessment and Implementation provides a
structuredapproachforevaluatingajurisdiction’sregulatorysystemfor
privatepensionsinrelationtotheCorePrinciples.Thepurposeofthe
Methodologyistoprovideguidanceinthedevelopmentoffuturepolicy. It
wasoriginallydesignedin2008astheprimarytoolfortheexaminationof
theprivatepensionsystemsofcandidatecountriesforAccessiontothe
OECDaswellasatoolforregulators,governmentofficialsandstakeholders
tohelpinotherassessmentprocesses.
TheCorePrinciplescoversevenkeyareas:
• Conditionsforeffectiveregulationandsupervision;
• Establishmentofpensionplans,pensionfunds,andpensionfund
managingcompanies;
• Pensionplanliabilities,fundingrules,windingup,andinsurance;
• Assetmanagement;
• Rightsofmembersandbeneficiariesandadequacyofbenefits;
OECDPRINCIPLESOFOCCUPATIONALPENSIONREGULATIONOOECD2010
4-EXECUTIVESUMMARY
• Governance;and
• Supervision (developed in cooperation with the Internal
OrganisationofPensionSupervisors).
The ultimategoaloftheCorePrinciplesis topromotethe sound
operationofprivatepensionplans,pensionfunds,andpensionentities. The
Methodologyisintendedtohelpidentifyspecificstrengthsandweaknesses
ofcountries’privatepensionssystemsinrelationtotheCorePrinciples,to
identifyreformprioritiesandtoultimatelyimprovetheperformanceof
privatepensions indelivering incomeandsecuritytopensioners. The
Methodology is a tool to help regulators, government officials and
stakeholders make practical decisions inorder toimplementthe Core
Principlesinday-to-daypractice.
OECDPRINCIPLESOFOCCUPATIONALPENSIONREGULATION©OECD2010
51
5
TableofContents
ExecutiveSummary 7
I. Introduction 11
TheUseandScopeofthisMethodology 1
TheGradingStructure 12
TheReviewerandtheAssessmentProcess 15
TheReportingFormatforanAssessmentusingthisMethodology 15
LimitationsofanAssessment 1
II. CountryBackgroundandNationalRegulatoryFramework 17
III. CorePrinciples 19
CorePrinciple1: Conditionsforeffectiveregulationandsupervision 20
CorePrinciple2: Establishmentofpensionplans,pensionfunds,
andpensionfundmanagingcompanies 23
CorePrinciple3:PensionPlanLiabilities,FundingRules,WindingUp
andInsurance 37
CorePrinciple4:AssetManagement 48
CorePrinciple5: Rightsofmembersandbeneficiariesandadequacy
ofbenefits 59
CorePrinciple6:Governance 74
CorePrinciple7: Supervision
(IOPSCorePrinciplesofPrivatePensionSupervision) 87
IV. OverallAssessment 95
ThePrivatePensionGovernanceLandscape 95
SummarizingwhathasbeenlearntfromtheAssessment
ofIndividualPrinciples 96
FormingaJudgementaboutPolicyImplicationsandPriorities 97
AppendixI. Questionstoassessajurisdiction’sprivate
pensionsystem 99
AppendixII QuestionstoassesstheSupervisionofa
jurisdiction’sprivatepensionsystem 113
OECDPRINCIPLESOFOCCUPATIONALPENSIONREGULATION©OECD2010
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7
ExecutiveSummary
The OECD Consolidated Core Principles ofOccupational Pension
Regulation (the “Core Principles”) present the key principles and
recommendationsthatshouldguidetheregulationofprivatelymanaged
occupationalpensionsystems.TheultimategoaloftheCorePrinciplesisto
promotethesoundoperationofprivatepensionplans,pensionfunds,and
pensionentitiesas ameansofprovidingincomeinretirementtoplan
membersandtopromotethesecurityofpensionbenefits.
TheMethodologypresentedin thispaperis intendedtoprovide a
structuredapproachforevaluatingajurisdiction’soccupationalpension
regulatorysysteminrelationtotheCorePrinciples.TheMethodologymay
alsobeusedforevaluatingpersonalpensionplansthataresecuredvia
pensionfunds.AllCorePrinciples,withtheexceptionofmostofCore
Principle#3,canbeappliedtosucharrangements.
TheCorePrinciplesofPrivatePensionSupervisionaspublishedbythe
InternationalOrganisationofPensionSupervisors(IOPS)arepresentedin
Section7ofthisMethodologyandareintendedtobeusedtoevaluatethe
supervisionofajurisdictionsprivatepensions.
ThisMethodologyisintendedastheprimarytoolfortheexaminationof
theprivatepensionsystemsofthecandidatecountriesforAccessiontothe
OECD. This Methodology is also intended as atool forregulators,
governmentrepresentativesandOECDofficialstohelpinotherassessment
processes. Assessments can be complemented with a review of a
jurisdiction’s supervisory framework, following the International
OrganisationforPensionSupervisors’“IOPSPrinciplesofPrivatePension
Supervision”.
ThisMethodologyisintendedtoprovideguidanceinthedevelopment
offuturepolicyinthearenaofprivatepensions.
OECDPRINCIPLESOFOCCUPATIONALPENSIONREGULATION©OECD2010
8-EXECUTIVESUMMARY
Thestructureofthismethodology
TheMethodologythatispresentedinthisreportisstructuredintothe
followingmainsections:
• I. Introduction
• II. CountryBackgroundandNationalRegulatoryFramework
• III.CorePrinciples
• IV.OverallAssessment
• AppendixIandII
Section I titled I. Introduction describes the purpose of the
Methodology, thegeneral approach andgrading systemtobe usedin
performinganevaluationofajurisdiction’sprivatepensionsystem,andthe
suggestedreportingformatfortheoutcomeofsuchanevaluation.
SectionIItitledII. CountryBackgroundandNationalRegulatory
Frameworkdeals with thevariousregulations,practices andstructural
information that is necessary for putting the assessment into a
national/jurisdictionalcontext.
SectionIIItitledIII. CorePrinciplesdealswitheachoftheOECD
Principles(onechapterforeachCorePrinciple). Thetreatmentofeach
chapteroftheCorePrinciplesfollowsacommonpatternandcomprisesof
twomainsections: anIntroductionandanImplementingGuidelinesand
Commentarysection.
The Introduction portion of Section III discusses the general
understandingoftheoverarchingprinciplethatopenseachchapterofthis
section. Building on the annotations to the Core Principle under
consideration,theintroductionalsodiscussesspecialconcernsandaspects
thatareintendedtobetakenintoaccountwhenconsideringimplementation
oftherespectiveprinciple.
TheImplementingGuidelinesandCommentaryportionofSectionIII
statestheImplementingGuidelinesassociatedwitheachCorePrinciple.To
clarifyhowajurisdiction’spracticescanbeassessedagainsttheCore
PrinciplesandtheirassociatedImplementingGuidelines,thereisadditional
commentarywhichdescribesthepurposeandmeaningoftherespective
principleandguidelinesinmoredetail.
SectionIV titledIV. OverallAssessmentdeals withhowall the
Principlesandassociatedassessmentsshouldbedrawntogetherinafinal
assessment,includingadiscussionofpolicyprioritiesandspecificmeasures
OECDPRINCIPLESOFOCCUPATIONALPENSIONREGULATION©OECD2010