EUROPE - Food manufacturer Nestlé has confirmed it sees the future of its pensions in pan-European pension funds.
Speaking at a meeting in Paris yesterday, Peter Hadasch, member of the board of Nestlé's €1bn German Pensionskasse said the pooling of its European liabilities, on top of the asset pooling it already does, would give the company an advantage.
"Pension systems are a lot easier to deal with when they fall under one legal structure," he said.
"We are going to create one pan-European pension fund in Belgium and have another pension fund in Germany, which is one of Nestlé's biggest pension funds. As a first step, we will use them for local, cross-border matters such as Belgian and Dutch pensions.
"If this goes well, we will implement the schemes of our factory sites in other European countries - particularly in Eastern Europe where our pension fund administration is still relatively small - into the pan-European pension fund."
"But for us, it is very important that the pooling is able to support tailor-made local solutions," he added.
However, Hadasch admitted that it was early days for Nestlé's pan-European vision and that the food manufacturer would need to acquire experience with the vehicles first.
He added that no major steps would be taken for the remainder of the year.
Hadasch also commented on the impact of the Solvency II regulation on European pension funds.
"It means we will have to increase our funding but the open question is still ‘who pays for that.' If we do not increase our funding level, we would have to reduce our risk by, for example, selling equities."
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