From the European Union through the Region to Hungary

Bucharest, 25.09.2006

From the European Union through the Region

to Hungary

Mihály ErdősStrategy Policy Director

CEIOPS OPC [email protected].: +36/1-489-9610


2

The Framework

• EU Regulatory and Supervisory Framework

• Pension Market in the CEE Region

• Hungarian Fund Development


3

Regulatory and Supervisory Framework

• Lamfalussy approach

• clear responsibilities

• cooperation• supervisors:

Level 3


4

CEIOPS and the OPC

• enhance the smooth implementation of the IORP Directive

• focus on cross-border issues


5

The EU Pension Regulation

• I. pillar: state, PAYG

• II. pillar: occupational plans

• III. pillar: personal plans

• I. pillar: new 1408 Regulation

• II. pillar: IORP and Portability Directive

• III. pillar: financial services directives

• But: PL, EE, HU


6

Different Approaches

World Bank

ILO OECD EFRP

I. pillar stateDBPAYG

basicfrom tax

state

PAYG

stateDBPAYG

II. pillar

personalmandatoryDC

statework-basedPAYG

occupational-mandatory-voluntary

workplace-mandatory

-voluntary

III. pillar

personalvoluntary

privatevoluntaryDC

personal-mandatory-voluntary

individual


7

EU Pension Fund MarketsPension Fund Asset, 2004

0

200000

400000

600000

800000

1000000

1200000

1400000

A B CZ DK FI F D H IRL I NL N PL P SW UK

mUSD

Source: OECD


8

World’s Largest Funds (2002, USDbn)

1. Japan Gov. Fund Japan 291

2. ABP NL 142

3. CALPERS USA 128.7

4. Local Gov. Officials Japan 101

5. Federal Thrift Savings Plan USA 96

6. New York State Common USA 95.9

7. Postal Savings Taiwan 95.8

8. California State Teachers USA 88.1

9. Florida State Board USA 78.7

10. National Pension Corp. Korea 77.3

Source: OECD


9

„Cross-border” Funds in the EU

Occupational Pension Funds, 2005

0

5000

10000

15000

20000

25000

30000

35000

Em

Source: IPE


10

A „Simplified” Model for Pan-European Funds

IORPDirective

RelevantS&L law

Pension scheme Pension scheme

Employer & employees

Employer & employees

IORP

Asset M. Admin.

IT ALM

Source: EU IMS DG


11

Personal Remarks

• implementation : the majority by June• pan-European funds: a pioneer needed• not classical solutions: asset pooling

(IRL, LU)• decline of traditional DB’s: funding

– increasing life expectancy, market valuation of liabilities

– poor equity markets, decline in interest rates

– labour market requirements• responses (OECD – NAPF)

– raising employer contribution– closing DB, opening DC for new

employees


12

The Regional Market

PL HU CZ SK EE1. Commercial Union OTP Winterthur Winterthur G Hansa P2. ING ING Ceske pojistovna Allianz G SEB P3. OFE PZU Aegon Komercni banky Allianz B Hansa B4. AIG Allianz Ceske sporitelny VUB G Sampo P5. Winterthur Winterthur ING ING G SEB C6. SAMPO Evgyuruk CSOB Winterthur B Hansa C7. Generali Aranykor Allianz VUB B ERGO P8. Bankowy GE CSOB Progres CSOB G LHV P9. OFE Skarbiec Uniqua Hornicky ING B Sampo B10. Allianz MKB Generali Aegon G ERGO C

Source: IPE


13

The Regional MarketLargest Funds in CEE

0

1000

2000

3000

4000

5000

6000

7000

mEUR

Source: IPE


14

The Regional MarketLargest Fund Groups in CEE

0

1000

2000

3000

4000

5000

6000

7000

ING Winterthur Allianz Aegon Generali

mEUR

Source: IPE


15

The Hungarian Market

• concentrated market

• similar to other financial markets

Number of Pension Funds

0

50

100

150

200

250

1998 1999 2000 2001 2002 2003 2004 2005

voluntary

mandatory


16

The Hungarian Market - Membership

Fund Members

0

500

1000

1500

2000

2500

3000

2000 2001 2002 2003 2004 2005

mandatoryvoluntary

New Members

0

200

400

600

800

1 000

1 200

1 400

1998 1999 2000 2001 2002 2003 2004 2005

th

mandatory

voluntary


17

The Hungarian Market - Assets

Asset of Pension Funds

0

200

400

600

800

1000

1200

1400

1600

1800

2000

2000 2001 2002 2003 2004 2005

bnHUF

voluntarymandatory

Asset Allocation of Mandatory Funds

0%

20%

40%

60%

80%

100%

2002 2003 2004 2005

others

inv.funds

stocks

gov.bonds

corp.bonds

bank


18

Asset Management

• conservative investment policy– driven by members– disclosure requirements– lack of proper investment tools

• introduction of lifestyle investment– more stocks and foreign investment

• pension reform does not solve the problems of domestic capital market


19

Development of Voluntary Funds

• driving force: employer

• generous tax treatment– absolute or

relative

• selling: based on employer– mandatory -

members

Income Structure of Voluntary Funds

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1998 1999 2000 2001 2002 2003 2004 2005

Members+

Other

Spec.reserve

Employer

Members


20

Costs and Limits (2005)

Total charges on assets

0%

1%

1%

2%

2%

3%

3%


21

Instead of Conclusions• mandatory: escape from the

state – no marketing• market done from the beginning• no cross-selling data use• cost effective in comparison with

others• IT problems – collection system• two pillars together


22

Date post:	12-Jan-2016
Category:	Documents
Upload:	delano
View:	37 times
Download:	6 times

From the European Union through the Region to Hungary

Documents