In Luxembourg there’s most action where there are fewest consultants. Most companies are positioning themselves for the impending flurry of work following the introduction by the government of ASSEPs and SEPCAVs, the country’s first vehicles designed for supplementary pension provision. But instead of larger, internationally-known consultants, it’s smaller outfits, the likes of JBI Associates, Barnett Waddingham, Pecoma, Ebica and Actualux that are a force in the relatively small Luxembourg market.
Barnett Waddingham set up in shop about 10 years ago in anticipation of potential business following the third life directive. Initially it specialised in actuarial work and product design for the life insurance companies, drawing on resources from its UK operation during busy periods. There are only four employees but managing director Ikram Shakir says potential growth in the pensions fund sector means this number will double by the end of the year. “If we are doing pension administration then we have to have people here who can deliver it,” he says. Most of the new recruits will be pension fund administrators. Barnett Waddingham scored a hit last year by becoming the first consultant to establish a SEPCAV – one on behalf of Alliance, the Saudi-based insurance company.
Similarly, PricewaterhouseCoopers supervised the creation of the country’s first ASSEP for Anglo-Dutch group Unilever. Philippe Leonard, the brains behind the fund, has since moved to ABN Amro to establish the pensions consultant Ebica. Leonard and a colleague launched the outfit but, like Barnett Waddingham, it should employ eight by the end of the year. Ebica is able to offer asset management through its parent bank and insurance products through ABN Amro Life and last month it secured the contract to set up a pensions administration system for a German bank.
In response to the pensions legislation Fernand Grulms, chief economist at the ABBL, left the association last year to set up PECOMA, dedicated specifically to pensions consulting. The group remains small but has substantial shareholders – Luxembourg’s largest life insurer La luxembourgeoise, Banque et Caisse d’Epargne de l’Etat and Compagnie Fiduciaire. PECOMA is working with about 15 local companies on externalising book reserves to the new vehicles and, in addition, is launching Luxpension, a new pooled pension fund, hopefully by May.
Deloitte Consulting, PWC and JBI Associates are all anticipating increased business from the introduction of the pensions vehicles. “Unilever coming to Luxembourg has been a major sign and there will be others for sure,” says Christophe Girondel, senior consultant at Deloitte Consulting. James Ball, head of JBI, says it used actuaries from Bacon & Woodrow but has since taken on its own. Recently it won mandates for two pensions schemes and Ball says the group is likely to register as liability managers.
It’s not that the ‘big five’ accountants are absent from Luxembourg. They are there but are simply focused on auditing and consulting for banks, investment funds and insurance funds. Leonard says clients are asking for more, for asset management, custody and pensions administration as well as tax and legal and actuarial help. “What we are trying to provide is consulting services in all areas,” says Leonard.
And although the larger consultants who are able to provide such a range of services have done the odd job in Luxembourg, they don’t have a significant presence there, and, according to Leonard, this is one of the reasons Ebica was established. But it appears the local consultants may soon be jostling for space with their international friends. If the pensions business takes off like the investment fund industry, the simple law of economics will apply – supply will meet demand. “If the draft of the pensions directive goes through and Luxembourg stays ahead of the other European countries, then they will probably enter into this market,” says Shakir.

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