EADS taps Invesco for overtime accounts
GERMANY – European aerospace and defence giant EADS has confirmed that Invesco’s German arm will set up and manage so-called “overtime accounts” for all its employees in Germany.
Pioneered by car giant Volkswagen, overtime accounts enable employees to save the monetary equivalent of overtime hours, unused holiday, cash bonuses or a portion of salary to help finance retirement or any time off from work. The savings, which can include matching funds from an employer, are tax-deferred.
Since early 2004, Invesco has managed overtime accounts for the 18,900 German employees at aircraft maker Airbus, which is part of the EADS group.
A spokesman for EADS in Munich said the new mandate would cover EADS’ 21,400 German employees ex-Airbus. They include those working in defence, space technology, aeronautics and at the Munich headquarters.
The spokesman added that the overtime accounts for employees ex-Airbus would based on those already set up at the aircraft maker.
This means that in investing the assets, Invesco will likely employ a life-cycle model involving equities, bonds and cash. Under the model, the younger the employee, the higher the equity exposure.
Invesco in Frankfurt could not be reached for further comment.
Invesco previously said inflows from the Airbus mandate had totalled €28.5m so far. In Germany, the US-based asset manager runs €4.3bn for institutional clients.
Owing to their low cost to employers and tax-deferred status, overtime accounts are rapidly proliferating in corporate Germany. Beyond VW and now EADS, bigger firms that are known to have set them up include Deutsche Bank and the German arm of computer firm Hewlett-Packard.