Pension fund solutions
Norwegian pension funds and their sponsors are facing extensive regulatory changes. As from January 1st 2019, Norwegian pension funds will be subject to the same capital and solvency regime as insurance companies (Solvency II). At the same time, the funds will be subject to the second generation of the EU pension fund directive (IORP2), under which risk management and administrative requirements similar to those of insurance companies will apply. The combined effect is to significantly increase both the capital requirements and the complexity of administration for the funds. Similar regulatory developments would seem to be in the works also in Sweden.
Under IORP2, the EU internal market and freedom of services principles / home state regulation applies to pension funds. Norwegian (and Swedish) occupational pension schemes can be established by, or transferred to, foreign life insurance companies or pension funds / IORPs with cross-border licenses. The establishment of multi-client and cross-border pension fund solutions is strongly supported by the EU Commission and EIOPA (the EU insurance and pension regulator), with a view to increase competiton and efficency.
Corum has developed a set of pension fund solutions, aimed at meeting the needs and requirements of Norwegian private and public sponsors of pension schemes. This ranges from a full transfer of pension schemes and the corresponding assets and liabilities, to various combinations of derisking pension funds and pension fund management. The models can also be applied to Swedish schemes.
The model has been developed in cooperation with two major Swiss financial institutions; the Swiss Life and LGT groups. Swiss Life, with total assets in excess of 200 billion CHF, is a leading European provider of comprehensive life and pensions solutions, with 160 years of experience. It is rated A by Standard and Poor's.
The LGT group, 100% owned by the Princely House of Liechtenstein, is the largest family owned asset management and private banking group in the world. Total assets are in excess of 200 billion CHF, and the bank is rated A+ by Standard and Poor's.
The solutions are based in Luxembourg, a major European insurance and pensions hub. Most administration and member services are however performed from Norway. Luxembourg, a founding member of the EU, offers a safe and predictable regulatory environment for cross-border pension solutions, with some of the best beneficiary protections in the world. Hundreds of cross-border insurance, reinsurance and pension companies have based themselves in Luxembourg, one of the few countries in the world rated AAA, or the equivalent, by all major rating agencies.
We'd be very happy to review the specific cross-border challenges and opportunities for Norwegian (and Swedish) pension funds and pension scheme sponsors.