Belgian public sector insurance company Ethias has set up a pension fund using the country’s dedicated legal vehicle for these purposes, the Organisme voor de Financiering van Pensionen (OFP).
The “organisation for financing pensions”, as the Flemish term for the country’s pension fund legal form translates into English, was set up in December 2015 and is called Ethias Pension Fund.
The pension fund is still in the early stages of its establishment, and a spokesperson for Ethias said the company did not wish to comment at this point of its development.
Ethias’s move is part of a general trend toward providing workplace pensions via pension funds rather than insurance companies, according to Elke Duden, counsel at Linklaters.
“Employers are transferring insured pension schemes to pension funds, and insurers are looking into setting up multi-employer pension funds from which to run defined contribution schemes for third-party companies given Solvency II regulation,” she told IPE.
Insurers are struggling to meet guaranteed returns on pension contributions given the low-yield environment and Solvency II, leaving plan sponsors with a shortfall to make up.
OFPs, like other Institutions for Occupational Retirement Provision (IORPs), are not subject to harmonised capital requirements like those facing the insurance sector since January this year.
Although still in the development stages, the new Ethias OFP has a board of directors and recently appointed a “delegated director”, effective 31 May.
Philippe Lallemand, a member of the Ethias management committee and board of directors, was nominated to the position.
Lallemand is one of six members of the board of directors of Ethias Pension Fund.
The FSMA, the Belgian supervisory authority for occupational pensions, had yet to grant a licence to the Ethias Pension Fund as at 1 July 2016, according to the FSMA website.
Ethias is the main insurer for Belgium’s public sector and its agents, and provides pension insurance for first and sector-pillar schemes in that sector.
It is majority-owned by the Belgian state and the Walloon Region and Flemish Region.
As at the end of the first quarter, it had a total balance sheet of €18.43bn, and a Solvency II margin of 110.92%.
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