Ireland’s state-run Investment and Development Agency (IDA) is to begin marketing its newly-developed International Financial Services Centre (IFSC)-based pan-European pension product within a month, targeting initially large US companies that have substantial numbers of mobile employees in Europe, says Brendan Logue, director of financial services at the IDA in Dublin.
Logue says that the initiative has generated wide interest among companies wishing to join the scheme and service providers that see it as major opportunity to expand their business. “Serious marketing will begin before mid-year and we have already done preliminary research with a number of large American companies. We hope to attract a mover before the end of the year and are in contact with potential clients.”
Logue presented the development recently at a conference in London, when he said the IDA’s decision to move into the corporate pension sector came as a result of recent pensions debates in Europe that signalled an opening of the European pensions market.
He said that the IDA had been researching for some time how eventual pan-European pensions products might look in light of assumptions about future European regulations and that its product was ready to be marketed this year.
The blueprint for the current development was eventually drawn up in line with current pensions market conditions across Europe, since the IDA believes that reforms are likely to be gradual and not drastic.
The initiative relates to a retirement savings product based on a life assurance model aimed initially at the mobile management market. Logue explained at the conference that companies basically establish a subsidiary management company at the IFSC through which they then purchases life-based retirement savings products. He said that these products would already need to be suited to the main European markets and approved for sale in them. They would be provided by established IFSC life companies.
Logue says these products would offer various unit-linked funds to both employer and employee and should qualify for cross-border distribution under the terms of the EU’s third life directive. The new fund scheme is also designed to be transferable as well as mobile, so employees may take it with them if they change job.
Although Logue believed the development didn’t provide the ideal solution to the question of a pan-European pension fund, since that was practically impossible at the moment because of national protectionism in the pensions sector, he felt the IDA had structured it in such a way that it would be able to adapt swiftly and easily to “the widest possible range of changes”.