New era for Occupational Insurance Funds

Get real time updates directly on you device, subscribe now.

By Dimitris Katsaganis

The 2nd pillar of insurance is on the path of change, ie the institution of Occupational Insurance Funds.

Sources of Capital.gr from competent officials of the Ministry of Labor state that in the last six months a project of technical assistance for the 2nd insurance pillar is in progress, which was requested by the Commission and its implementation was entrusted to the European Insurance and Occupational Pensions Authority (European Insurance and Pensions). Occupational Pensions Authority (EIOPA), ie the competent supervisory authority of occupational insurance funds in the EU. The proposals of the technical assistance project for improvement changes and interventions in the framework and supervision of occupational insurance by EIOPA on the basis of good international practice are expected to be finalized and submitted in the form of a report by the end of March 2022.

Secure information of Capital.gr from factors that have been involved in the consultations for the forthcoming changes in the 2nd pillar state that the three most important issues considered for adoption are the creation of a single supervisory authority for TEA, the institutionalization of multi-employer Professional Funds and the expansion of investment options for insured members of the Funds.

More analytically, among the proposals that have fallen on the table, according to occupational insurance agents with whom Capital.gr came in contact, are the following:

Unified supervision

The same sources emphasize that the supervision of the 2nd pillar of insurance, ie the TEA, is currently fragmented and not unified, as it is exercised by three supervisory authorities, namely the Ministry of Labor, the National Actuarial Authority and the Hellenic Capital Market Commission.

In addition, according to executives in the occupational insurance sector, the competent supervisory authorities do not have the necessary staffing capacity to effectively carry out their supervisory and control work.

From this point of view, significant delays are recorded in the procedures concerning the approvals, but also the amendments of the Articles of Association, the control of data, the issuance of relevant certificates, etc. of professional funds.

For example, the licensing time of the Statute of a new professional fund can last from 8 to more than 12 months, due to the fragmented and understaffed current structure of the supervision of the professional funds.

At the same time, the respective licensing procedures for approving amendments to the Articles of Association of the existing professional funds are particularly time-consuming, which causes costs and complicates the work of TEA participants in the occupational insurance market.

Possibility of setting up multi-employer professional funds without a professional connection

Occupational Insurance Funds (TEA) which are established by a branch or branches of employees are already provided for by the existing institutional framework.

Nevertheless, until now there are professional funds in Greece which have been set up in particular “individually” closed by companies only for their staff.

This excludes all other smaller employers. From this point of view, suggestions have been submitted, according to occupational insurance executives with whom “K” came in contact, for the institutionalization of the possibility of multi-employer TEA. These can be set up just like the standard TEAs based on the institutional framework of Law 3029/2002, ie, for example, by a company or professional association, but provide specific retirement programs in which other employers (companies), professional associations, self-employed or self-employed, without the need for the relevant trade union.

What is completely new in this is that this opportunity could be exploited by companies, especially in the financial sector (eg banks, insurance companies) and / or other professional groups from the private sector, thus enhancing competition within the second pillar. and its significant further development, note the same sources.

Ability to provide investment options to members

According to the same sources, the possibility of increasing the degrees of freedom regarding the investment choices of the insured members of the professional funds and to legislate them to be provided with investment products of different risk profile, based on the age of the insured members of TEA ( eg life-cycle investment products). It is emphasized that the specific practice of investment management was instituted for TEKA and the new employees who will be insured in it from 1/1/2022, by the government and the leadership of the Ministry of Labor.

At the same time, the following proposals have fallen on the table:

– Maintaining the existing tax incentives of the 2nd pillar.

– Abolition of the existing mandatory limit of 100 people for the creation of TEA.

– Legislative provision for favorable tax treatment of the transfer of stocks from similar activities. For example, the possibility of transferring assets from a private pension plan of an insurance company to TEA (and vice versa) without tax burden.

– Exemption from VAT of the administrative functions of TEAs required by law (accounting, computerization, actuarial, risk management, investment services, etc.), given their non-profit nature and the obligation of strict regulatory compliance to fulfill the purpose their.

– Application of the criterion of proportionality to the supervisory obligations of the professional funds in order to limit the significant operating costs, especially of the small insured members of TEA.

.

Source From: Capital

Get real time updates directly on you device, subscribe now.

Leave A Reply

Your email address will not be published.