The Pensioneer Trustee Company (Guernsey) Limited


Pan-European Pension Plans

The Pan-European Pension Plan is an occupational employer sponsored pension scheme aimed primarily at those employed within the Europe Union (EU) sometimes referred to as a ‘cross-border scheme’.

The terms of the Institutions for Occupational Retirement Provisions (IORP), an EU Pensions directive adopted by the European Commission, provides member states with a framework to enable cross-border pension schemes to be established. This EU directive has therefore laid the foundations for a single market for European workplace pensions.

Cross-border schemes are pension arrangements which are based in one EU or EEA Member State (referred to as the ‘Home Country’) but which have sub-schemes for employees based in other Member States (known as the ‘Host Countries’). As a result of the IORP Directive and the subsequent national implementing legislation, it is now possible for existing schemes, acting as the Home Country, to create new sections for employees of associated companies based elsewhere in the EU. Those sections must be operated in accordance with the social and labour laws of each Host Country admitted. 

What is a Pan-European Pension Plan? 

A Pan-European Pension Plan is an occupational pension plan (the “scheme”), which falls within the classification of the IORP. 

The scheme will be designed to provide retirement benefits for employees, across the European Union under one master plan established in the Home Country. For each Host Country admitted, a separate sub scheme would be established which would be required to comply with local pension and tax laws, as defined in separate rules for that sub scheme. 

By way of example a company which has operations (and employing entities) in the UK, Denmark and Germany, may currently have a pension scheme established in the UK for their employees in that country but would like to extend this scheme to their other EU employees. The pension scheme already established in the UK will become the Home Country and it will subsequently be able to create sub schemes for and admit to it, those employees based in Denmark and Germany, the Host Countries, with each sub scheme having rules and being administered in accordance with the laws of that country. 

In addition to the ability to consolidate membership the employer will be able to elect a single investment strategy to apply across the schemes and ensure that administration is consistent including provision of information to members (subject to any host country requirements). 

Mobile employees 

Employees, who are globally mobile, or mobile within Europe, will benefit from such a cross border scheme too. Instead of a multitude of pensions with different providers in various Host Countries, the employees will be members of a single scheme albeit that they may have different rules applying to different “pots”. As such the employees will be able to consolidate their pensions into an easily managed account. 

How does this compare to an International Pension Plan (IPP)? 

The Pan-European Pension Plan is designed for those employed within the Europe Union. The remit of this scheme is the provision by an employer of a pension at retirement based on employment. Schemes must comply with both EU Pension Directives/Regulations and with the individual underlying country rules. The Pan-European Pension Plan is therefore more structured, must be fully funded and falls within the IORP directive. 

An International Pension Plan can be used for various geographical locations including; Africa, Asia, Eastern Europe, Middle East and South America. It would not be compliant with the IORP and hence less suitable for mainland Europe. The scheme rules of an IPP are more flexible and can be established as an occupational scheme, or as a multi member scheme for unrelated/ unconnected individuals. While such schemes are usually tax neutral in the country in which they are established consideration needs to be given to the tax treatment of both contributions and benefits in the individual countries as they relate to employer and employees. 


Over a decade ago the Institutions for Occupational Retirement Provision Directive established the pathway to a unified pension system across Europe. It created a framework within Europe to enable cross border activities, which would provide synergies across the continent and benefit both employers and employees. IORP II, which is expected to be implemented into the national law of each member state by 31 December 2016, will further enhance the harmonisation of cross border pensions within the EU and the Pan-European Pension Plan will become a central planning tool for the those employing people in the EU.



Further information

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The Pensioneer Trustee Company (Guernsey) Limited
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Guernsey, Channel Islands, GY1 1LT

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The Pensioneer Trustee Company (Guernsey) Limited is licensed by the Guernsey Financial Services Commission under The Regulation of Fiduciaries, Administration Businesses and Company Directors, etc. (Bailiwick of Guernsey) Law, 2000.