The new chief executive officer of the Norwegian Pension Fund Association (Pensjonskasseforeningen), Christer Drevsjø, said the lobby group’s members are prepared for the national implementation of the EU’s IORP II directive, which was published as a proposal last month.
But it is national, rather than EU regulations that are causing the biggest challenges for the Nordic country’s pension funds, Drevsjø told IPE, as he outlined the priorities for the industry association since he formally took the reins in October.
In an interview with IPE, Drevsjø – who had been running the Oslo-based association as its acting leader ever since its former general secretary Espen Kløw resigned this summer – said the proposal submitted by the Norwegian government in December putting elements of IORP II into national law did not contain any big surprises for the organisation and was largely in line with its input and expectations.
“Fortunately, the Ministry of Finance has not gone ahead with some of the FSA’s most far-reaching proposals related to the pension funds’ handling of outsourcing,” he said.
The new pension fund regulation would involve additional work and increased expenses for the pension funds, however, he said.
“Fortunately, I find that both the pension funds and their subcontractors are well prepared in relation to new requirements and tasks, even though we would have liked to be spared the additional cost,” Drevsjø said.
But he said that from a Norwegian point of view, it was not necessarily regulations from the EU that had represented the biggest challenges for pension funds – but rather national regulation.
“An example of this is the Norwegian special capital requirement for pension funds, which entails a capital requirement corresponding to Solvency II, but with a simplified calculation methodology,” he said.
Another example related to rules on delivering defined contribution pensions (DC), he said, which had meant that as of 2022, no pension funds had DC pensions as part of their own portfolio.
“There is also a big discussion going on right now about how the management costs of funds’ investments must be managed. The FSA has interpreted the regulations in a way that we believe is not beneficial to either customers, licensees or the pension funds,” he said, adding that the social partners shared this opinion, and that an external legal report backed this up.
Asked about plans for change at the Norwegian Pension Fund Association since he had taken over its leadership, Drevsjø said the organisation would strive for increased visibility – something that had been on his agenda for the past six months.
“In order to safeguard and promote our interests, we must be visible,” he continued.
“Overall, it is a goal that the pension funds should have good framework conditions, so they can continue to be the best providers of occupational pensions,” he said, adding that official FSA figures showed the excess returns created by pension funds, in both public and private sectors.
The association’s members managed more than NOK550bn (€55.4bn) overall, he said, but it was also important to take into account that many pension funds were relatively small and had limited administrative staff.
“The regulations for pension funds and the practice of this must reflect proportionality. It is very important that the regulatory authority sees and recognises the difference between pension funds and life insurance companies; we are fundamentally different,” the CEO stressed.
In dialogue with its board, the lobby group is also in the process of strengthening its secretariat by adding a new specialist position to make it better equipped in areas such as statistics, analysis and accounting issues, said Drevsjø.
“I myself, with a background as a lawyer, will spend part of my working time on new regulations, framework conditions and business policy,” he said, adding that the association is a competence centre for pension funds.
Over the course of this year, he said the association would also work on providing a relevant conference and course offering for members, various consultation statements and talks with government, along with alliances and general information work, the CEO said.
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