The Pensions Regulator

EU cross-border pension schemes

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Applying for authorisation and approval

Trustees may apply for authorisation for a scheme to accept contributions in respect of European members in general and for approval to accept contributions from a specific European employer either together or as two separate applications. The application must be made either at the same time as the application for approval, or before it.

If a scheme applies for both authorisation and approval at the same time, we will process the application for authorisation before considering that for approval.

We cannot consider an application for approval from a scheme which is neither authorised nor applying for authorisation.

A scheme only needs to apply for authorisation once. However, it will need to apply for approval for each employer that participates in the scheme, and should apply for approval for each EU member state in which it will operate, even if the same employer covers all the EU member states concerned.

A scheme may be authorised to accept contributions in respect of European members in general without having approval to accept contributions from a specific European employer. To make an application you can download our application forms for authorisation and for approval.

Signing the declaration

Trustees must read and sign a declaration that the information given is correct and complete to the best of their knowledge and belief. There are penalties for providing false information.

The declaration should be completed by:

• all the trustees of the scheme;
• an existing scheme providing pension benefits for such employees who have already been accruing pension benefits; or
• the managers of the scheme, if there are no trustees.

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Applying for authorisation

Before a scheme can accept contributions in respect of European members, it needs to be authorised to do so. This is the case whether the scheme is:

• an existing scheme providing pension benefits for non-seconded overseas employees in a member state for the first time;
• an existing scheme providing pension benefits for such employees who have already been accruing pension benefits; or
• a new scheme specifically set up to provide benefits for such employees.

The trustees of a scheme which is going to accept such contributions have a duty to apply for its authorisation.

Authorisation is a general process; it does not relate to operations in a specific EU member state, and need be obtained only once, no matter how many EU member states or separate employers become involved with the scheme.

Authorisation does not, by itself, allow a scheme to accept contributions from any specific European employer. A scheme can only accept contributions from a specific European employer in accordance with the terms of an approval granted to it.

Before a scheme can be authorised, it will need to be registered by the Pensions Regulator and will need to quote its registration number on the application for authorisation. This is the eight-digit PSR number (not the HMRC number).

The Pensions Regulator has the right to scrutinise applications for authorisation in line with the cross-border legislation. Usually, the Pensions Regulator will authorise a scheme as long as:

• the required documents are provided;
• the required declarations are signed; and

confirmation is received that the cross-border scheme funding requirements will be met by the required date. 

Scheme funding requirements

Schemes which apply for authorisation are expected to comply with the cross-border funding requirements and we will not be able to authorise schemes which do not meet these requirements.

The requirements are:

• for a new scheme, that it will meet its statutory funding objective within two years of the date of application for authorisation;
• for a scheme which already exists, but is going cross-border for the first time, that it meets its statutory funding objective at the date of application; and
• for a scheme which already exists and is already operating cross-border, that it will meet its statutory funding objective, based on a valuation under Part 3 of the Pensions Act 2004, by 22 September 2008, or the date of application if later,

in each case without the use of a recovery plan. The statutory funding objective must be met for the entire scheme for which application for authorisation is being made; it cannot be met for a ‘European’ part of a single employer scheme.

Applying for approval

The trustees of any UK scheme which is going to accept contributions from a specific European employer must obtain approval from the Pensions Regulator in respect of each such specific European employer.

The trustees of a scheme need to complete an application form for approval and to provide the documents and information required.

Some of the documents and information required for authorisation will also be required for approval. If application is made for authorisation and approval at the same time, it is not necessary to supply all the information again.

However, if there is a time-lag between the two applications, then either a declaration confirming that there has been no material change to the information supplied must be signed, or the information must be supplied again if there has been any material change.

Approval is required for each specific European employer that has employees in the scheme, and should be obtained for each EU member state in which members are located, even if one employer covers employees in more than one EU member state.

Approval can only be granted in the member state where authorisation was granted. A scheme authorised by the French authorities, for example, could not apply to the Pensions Regulator in the UK for approval.

The Pensions Regulator will grant approval provided there is no reason to doubt that:

• the administrative structure of the scheme concerned; or
• the financial situation of the scheme concerned; or
• the repute and the professional qualifications or experience of those running the scheme

is compatible with the proposed operations in the specified host member state.

We will base our decision on the information contained in the application form and any other data about the scheme which is available to the regulator.

The regulator is obliged to pass on the information contained in the application form to the host member state in which the scheme’s European members are located. For this reason Parts 2 and 3 of the application form for approval need to be completed in the language of the country in which it is intended that cross-border operations take place, as well as in English.

We do not supply a translation service and expect schemes operating cross-border to have their own translation facilities. (This rule does not apply to applications to operate in Holland, as the Dutch regulator is willing to accept notice of applications in English.)

If upon receipt of the information contained in Parts 2 and 3 the host state regulator raises issues about compliance with that state’s social and labour law, or such issues are known to the Pensions Regulator, we will raise these with the scheme. Withdrawing an application

If the trustees of a scheme find that an application for authorisation or approval is no longer needed, it can be withdrawn by writing to the regulator, stating the circumstances.

For example, this could be because the potential European members have retired from the scheme and the employment, or have left employment and taken a transfer value representing all their benefits to another arrangement.

Provided the regulator is notified before authorisation or approval has been granted, we will be happy to confirm that the request has been withdrawn and that the scheme has not been authorised or approved to accept contributions in respect of European members, as appropriate.

Withdrawing an application

If the trustees of a scheme find that an application for authorisation or approval is no longer needed, it can be withdrawn by writing to the regulator, stating the circumstances.

For example, this could be because the potential European members have retired from the scheme and the employment, or have left employment and taken a transfer value representing all their benefits to another arrangement.

Provided the regulator is notified before authorisation or approval has been granted, we will be happy to confirm that the request has been withdrawn and that the scheme has not been authorised or approved to accept contributions in respect of European members, as appropriate.

Applying for revocation of authorisation or approval

If authorisation or approval has been granted to a scheme but is no longer required because there are no benefits remaining in the scheme in respect of any member or deferred member who is or was a European member or European survivor, then the trustees can apply to the regulator to have the authorisation and approval revoked.

The application can be made in writing to the regulator giving details of the scheme and setting out the circumstances.

We will consider the circumstances of the request and, if satisfied that there are no cross-border benefits remaining which require protection, will confirm the revocation.

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