LIECHTENSTEIN - German insurer LV 1871  has launched a new corporate pension fund in Liechtenstein, bringing the principality closer to its rivals Luxembourg and Ireland in the race for European occupational pension funds.

The Munich-based life insurer's spin-off is the first in the principality under the recently implemented law to bring second-pillar pension funds in line with the European occupational pension funds directive.

LV 1871, which initially will target the German market, chose Liechtenstein as domicile for its new pension funds due to the "proximity to our head quarters and the same language", a spokesman of LV 1871 was quoted as saying in news reports.

"For us it is much easier if the official language is German, in comparison to for instance French in Luxembourg or English in Ireland," he added.

The new fund plans to gather assets of €100m over the next three years.

According to Liechtenstein's regulator, the FMA, another party has already confirmed it will also chose the principality as its domicile, according to a spokesperson at the organisation.

"Next to that there are further applications of another five organisations who have shown solid interest," she added.

Earlier this year, Liechtenstein's second pillar pension schemes were linked to the Swiss pension protection fund, following an agreement between Switzerland and Liechtenstein in December last year.