But the paths to Belgium, UMR Corem’s chosen domicile, and Luxembourg, that of AG2R La Mondiale, are not as well trodden. Although there are some 84 cases of existing cross-border pension activity, as reported by EIOPA, the European Insurance and Occupational Pensions Regulator, most of those relate to UK and Irish funds, some of which, in any case, already operated on a cross-border basis due to mutual tax and regulatory recognition.
The decision to move domicile is not one that either UMR Corem or AG2R La Mondiale have taken lightly. Indeed, the headwinds are against a move in particular to Luxembourg, which carries unfortunate associations with tax avoidance in much of Europe. And the decisions, it should be emphasised, are certainly not a case of regulatory arbitrage, since there is no French IORP regime to arbitrage against.
Belgium, when it created its IORP-compliant OFP (Organisation for Financing Pensions) in 2006, also went to lengths to create a friendly regime for those considering a move. UMR Corem cites the zero taxation on capital gains and VAT exemption for management and financial assets, and for administrative services. It will also be able to select a higher (but in its view still prudent) discount rate. As a result, it says, the Belgian domicile will mean pension payments 20 per cent higher than would be possible in France.
Ten years on from the IORP Directive and more than half a decade since Member States implemented it, it is heartening that there is finally some traction in cross-border pensions. But the structural factors of the French market and the lack of an IORP regime mean that these two moves, while a welcome boost to the idea of cross-border pensions, are not the sign of a healthy, functioning European market in occupational pensions.
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