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IBM in European pooling re-think

Computer giant IBM is understood
to have had a re-think about pooling
its European pension assets because
of uncertainty over tax harmonisation.
The company won’t commit itself to
either Dublin or Luxembourg while
the harmonisation issue is still unresolved
and is prepared to wait as long
as necessary.
IPE understands IBM does not
want to rush into anything,
especially given what it sees as its
leadership role in the business
community.
The move could be a blow to IBM’s
pension pooling partner Northern
Trust. In July Northern Trust said it
was working with two multinational
companies, one of which is IBM, on
tax-transparent pension pooling.
Other firms involved were Goldman
Sachs and Mercer Investment Consulting.
In April IPE reported that IBM
was likely to become one of the first
multinational companies to use the
common contractual fund (CCF),
Ireland’s new tax transparent pooling
vehicle, to pool its pension
funds’ global equity assets.
Martin Jack, director of IBM
Retirement Funds EMEA (RFE),
the internal investment consultancy
that supports 20 pension funds in
Europe with assets of around €16
bn, told IPE at the time that the
decision to choose a CCF was “not
yet 100% but almost certain”.
Earlier the company said it has
guaranteed to make contributions
of £18m for the next three years to
its £3.25bn (€4.6bn) UK defined
benefit pension scheme, which is
£900m in deficit.
IPE was informed this decision
should clear up fears that the company
planned to wind-up the
scheme. “Wind-up was never on
the agenda,” according to the
source.

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