LUXEMBOURG – The Luxembourg supervisory authorities have made a series of amendments to 1999’s pension fund law that introduced the ASSEP and SEPCAV vehicles to the Duchy in a bid to promote the country as an international pension fund centre.

The amendments, which the authorities say were made to optimise the existing legislation, include the fact that companies can now provide seed money at the inception of a fund to ensure diversified asset management from the off.
As new members join so an employer’s initial payment is gradually reduced.

Interestingly, the amendments also say that foreign companies with “social objects” that are “similar” to a Luxembourg pension fund can change their nationality in order to become a Luxembourg company and vice versa.

Furthermore, public reports now only have to be published on an annual basis only, instead of biannually.

Significantly, the Luxembourg authorities say they are also trying to improve fiscal transparency and the acceptance of the pension fund vehicles in other countries through exchanges of information.
To this end, for both ASSEP and SEPCAV arrangements, tax information has to be passed to the authorities on an obligatory basis by the end of the month following the closure of the social year

However, under the amendments custodians are given the added responsibility of checking that payments by contributors are made on time.

While to date only three pension funds have been granted approval under the 1999 law , more than half a dozen have been submitted for inspection and several more are in the planning, according to observers.