GLOBAL – Northern Trust says it has boosted its pension pooling offering by developing a product that allows multinational companies to “commingle” US pension assets with non-US assets.
Chicago-based Northern says it has developed what it terms the first proprietary solution to allow large firms to combine US defined benefit assets with assets from non-US subsidiaries in a single offshore pooling vehicle.
Kathy Dugan, Northern Trust’s multinational product manager, said: “The new Northern Trust ERISA Solution for Cross-Border Pension Pooling enables more multinational companies to capitalize on the benefits of bringing cross-border assets together for investment management purposes.”
ERISA is the Employee Retirement Income Security Act, which covers employee benefits in the US.
Dugan added: “By pooling assets from subsidiary pension plans across the globe, including the US, a multinational can more effectively control manager selection and investment risk, simplify administration, and gain economies of scale.
“We are currently implementing tax-transparent vehicles - the Irish Common Contractual Fund (CCF) and the Luxembourg Fonds Commun de Placement (FCP) - for clients who wish to offer global equity mandates through a pooling vehicle to their pension plans worldwide.”
Northern Trust did not name the clients.
The move follows an IPE report yesterday that a £6bn (€8.7bn) UK pension scheme was being transferred to a Dublin-domiciled pooled vehicle, known as a Common Contractual Fund. IPE has not been able to determine the identity of the scheme.
In February this year, Kredietbank’s Luxembourg arm said it launched a €1.1bn pension pooling vehicle for the Suez-Tractebel group.