OECD Core Principles of Private Pension Regulation

09/11/2016 - Private pensions play a major and growing role in complementing retirement income from public sources in OECD countries and worldwide. Their importance in ensuring adequate pension provision is increasing as government revenues are less able to finance retirement promises.

The economic crisis led to a loss of public confidence in private pensions in many countries which needs to be reversed in order to encourage individuals to save for retirement. At the same time, the financial sustainability, solvency and adequacy of private pensions are challenged by population ageing and by an economic environment characterised by low growth, low returns and low interest rates. Efficient regulation and management of private pension systems are essential to withstand these pressures and to rebuild trust in private pensions.

Adopted by the OECD Council on 27 September 2016, the OECD Core Principles of Private Pension Regulation serve to encourage more efficient regulation and management of private pension systems, thereby helping countries to strengthen private pension systems and improve their complementary role in ensuring that retirement income is adequate. They provide governments, regulators and supervisors worldwide with a relevant common benchmark and high-level guidance on the design and operation of private pension systems.

The 2016 Core Principles have updated and expanded the 2009 OECD Core Principles of Occupational Pension Regulation. This update was conducted in coordination with pension regulators across OECD and IOPS countries and benefited from contributions received via a public consultation.

The revised Core Principles now include all funded pension arrangements, reflecting changes in the nature of private pension provision, especially the rise in defined contribution and personal pension plans. The changes harmonise them with other relevant instruments:

G20/OECD High-Level Principles of Long-Term Investment Financing by Institutional Investors

Recommendation of the Council on Good Practices for Financial Education Relating to Private Pensions

G20/OECD High-Level Principles for Financial Consumer Protection

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