1. Bucharest, 25.09.2006 From the European Union through the Region to Hungary Mihály Erdős Strategy Policy Director CEIOPS OPC Chair Erdos.Mihaly@pszaf.hu Tel.: +36/1-489-9610

2. Bucharest, 25.09.20062 The Framework EU Regulatory and Supervisory Framework Pension Market in the CEE Region Hungarian Fund Development

3. Bucharest, 25.09.20063 Regulatory and Supervisory Framework Lamfalussy approach clear responsibilities cooperation supervisors: Level 3

4. Bucharest, 25.09.20064 CEIOPS and the OPC enhance the smooth implementation of the IORP Directive focus on cross- border issues

5. Bucharest, 25.09.20065 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. Bucharest, 25.09.20066 Different Approaches World Bank ILOOECDEFRP I. pillar state DB PAYG basic from tax state PAYG state DB PAYG II. pillar personal mandatory DC state work- based PAYG occupational -mandatory -voluntary workplace - mandatory -voluntary III. pillar personal voluntary private voluntary DC personal -mandatory -voluntary individual

7. Bucharest, 25.09.20067 EU Pension Fund Markets Source: OECD

8. Bucharest, 25.09.20068 World’s Largest Funds (2002, USDbn) 1.Japan Gov. FundJapan291 2.ABPNL142 3.CALPERSUSA128.7 4.Local Gov. OfficialsJapan101 5.Federal Thrift Savings PlanUSA96 6.New York State CommonUSA95.9 7.Postal SavingsTaiwan95.8 8.California State TeachersUSA88.1 9.Florida State BoardUSA78.7 10.National Pension Corp.Korea77.3 Source: OECD

9. Bucharest, 25.09.20069 „Cross-border” Funds in the EU Source: IPE

10. Bucharest, 25.09.200610 A „Simplified” Model for Pan-European Funds IORP Directive Relevant S&L law Pension scheme Employer & employees Employer & employees IORP Asset M.Admin. ITALM Source: EU IMS DG

11. Bucharest, 25.09.200611 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. Bucharest, 25.09.200612 The Regional Market Source: IPE

13. Bucharest, 25.09.200613 The Regional Market Source: IPE

14. Bucharest, 25.09.200614 The Regional Market Source: IPE

15. Bucharest, 25.09.200615 The Hungarian Market concentrated market similar to other financial markets

16. Bucharest, 25.09.200616 The Hungarian Market - Membership

17. Bucharest, 25.09.200617 The Hungarian Market - Assets

18. Bucharest, 25.09.200618 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. Bucharest, 25.09.200619 Development of Voluntary Funds driving force: employer generous tax treatment –absolute or relative selling: based on employer –mandatory - members

20. Bucharest, 25.09.200620 Costs and Limits (2005)

21. Bucharest, 25.09.200621 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. Bucharest, 25.09.200622