OECD principles of occupational pension regulation [electronic resource] : methodology for assessment and implementation implementation PDF
Preview OECD principles of occupational pension regulation [electronic resource] : methodology for assessment and implementation implementation
OECD Principles ofOccupational Pension Regulation METHODOLOGYFORASSESSMENT ANDIMPLEMENTATION «• OECD Copyrightedmaterial Copyrightedmaterial OECD Principles of Occupational Pension Regulation METHODOLOGYFORASSESSMENTAND IMPLEMENTATION m OECD Copyrightedi ORGANISATIONFORECONOMICCO-OPERATION ANDDEVELOPMENT TheOECDisauniqueforumwheregovernmentsworktogethertoaddresstheeconomic, socialandenvironmentalchallengesofglobalisation.TheOECDisalsoattheforefrontofefforts tounderstandandtohelpgovernmentsrespondtonewdevelopmentsandconcerns,suchas corporategovernance,theinformationeconomyandthechallengesofanageingpopulation. TheOrganisationprovidesasettingwheregovernmentscancomparepolicyexperiences,seek 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 SlovakRepublic,Slovenia,Spain,Sweden,Switzerland,Turkey,theUnitedKingdomandthe UnitedStates.TheCommissionoftheEuropeanCommunitiestakespartintheworkoftheOECD. OECDPublishingdisseminateswidelytheresultsoftheOrganisation’sstatisticsgathering andresearchoneconomic,socialandenvironmentalissues,aswellastheconventions, guidelinesandstandardsagreedbyitsmembers. ThisworkispublishedontheresponsibilityoftheSecretary-GeneraloftheOECD.Theopinions 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 tpruabnlsilcaotriocnomrimgehrtcsisahlouusledsbhealslubbemiatdtderdestsoedridghitrse@cotelcydt.oortgh.eRCeoqpuyersitgshtfCorlepaerramnicsesCieonntteorp(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 Copyrightedmaterial 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
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