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Italy-Germany cross-border pension fund planned

EUROPE - PensPlan, the pension services provider of the semi-autonomous Trentino Alto Adige region in northern Italy, is planning to offer a cross-border fund in Germany under the pension directive.

It will offer its new open pension fund PensPlan Profi in Germany by the middle of next year, PensPlan managing director Michael Atzwanger said.

"We want to realise the same PensPlan project in Germany as we did in South Tyrol," he said in an interview. "In a second step that means that we will offer PensPlan Profi in Germany."
 
Atzwanger is certain that the company's approach of targeting small and medium-sized companies and offering their employees second-pillar pension fund solutions will be as successful in other European countries.

"These employees are ignored by large pension funds. So we have to go to them and convince them that they will have a financial problem once they retire," says Atzwanger. In a first step he wants to get the provinces to neutrally promote the second-pillar pension scheme.
 
The former president of the German federation of industries, Klaus Murmann, will support PensPlan. He will offer its services and products in his companies under the Murmann Group.

"A trustworthy businessman like him can help move things in the right direction," Atzwanger said.
 
A German operating company will be set up within the next month. The business plan has already been drawn up and the funding guaranteed.

At the moment the PensPlan Profi fund cannot yet be offered as Italy has not implemented the European pension fund directive (Institutions for Occupational Retirement Provision, IORP).

"We have been assured that this will happen in October or November at the latest. On the next day we will file our application to export this pension product," Atzwanger says.

Tax is one of the big question marks that remain as Italy is levying an 11% tax on investment returns and so far there is no way to get this money refunded. However, Atzwanger is not particularly worried about this point.

"I agree that on an EU-wide basis harmonisation will be hard to achieve. But there are already bilateral tax agreements in place and the supervisory boards said that a solution must be found and will be found." Nothing concrete was decided yet.

He says that the authorities he is in contact with are all very positive about the project but did not disclose which province PensPlan will target first.

"Our good relations with the supervisory authorities built up over the last 10 years are what kept us alive. We are the ones who are looking for solutions for the second-pillar pension system. We are not the ones that sell products and want to make profit."
 
"Similarly we do not go to Germany to make a profit. We believe that the problem has to be approached all over Europe. And we are offering solutions. We have been welcomed with open arms."

Atzwanger is not afraid to face the criticism and scepticism that is sure to arise in Germany once PensPlan enters the pension scene, just as it did in Italy and partly still prevails.

"We have fought windmills for 10 years in Italy but now the project is successful."
 
The PensPlan Profi fund was set up in Italy in February at the initiative of South Tyrolean business associations by PensPlan's subsidiary PensPlan Invest. The targeted membership number for Italy is 50,000 within the next years. Employees can join the fund via their associations.
 
PensPlan Profi offers three different investment lines with different investment strategies and benchmarks. As for asset allocation, Atzwanger says initially it will be similar to that of large European funds like Dutch healthcare scheme PGGM.

Later a small part of the portfolio, five to 10%, could be invested in regional companies.
 
PensPlan currently has €500m under management in its three pension funds Laborfond, PensPlan Plurifund and PensPlan Profi.

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