LUXEMBOURG - Electronics giant Philips has set up a Luxembourg-based pan-European pension fund in accordance with the IORP directive on occupational pension funds.
"The first pan-European pension established in accordance with Directive 2003/41/EC [Institutions for Occupational Retirement Provision] has been created in Luxembourg," said consulting firm EBICA, which developed the plan for the company.
The move has been long-awaited, said EBICA's managing director Sabine Lallier. She told IPE: "A lot of companies have been waiting for Philips to make it official."
EBICA or Employee Benefits International Consulting and Administration, is a joint venture between ABN Amro and Bâloise Vie. It manages the worldwide plan for Philips.
Lallier said the plan has no need for asset pooling. She declined to disclose the amount of assets involved or the number of employees covered.
She explained the project required a lot of legal work with fiscal and labour laws, with the latter more of a problem due to the lack of uniformity. Labour law is not part of the IORP directive.
She declined to explain how the plan deals with taxation. "It's always a factor - it's very complex."
Philips International Pension Fund asbl is monitored by the Luxembourg insurance supervisor the Commisariat aux Assurances.
"The main advantage of this pension plan is that it is designed to incorporate complex administrative processes that commonly affect expatriates and geographically mobile employees."
Members stay within a single administrative structure regardless of where they live or work.
Upon retirement payments are made by a single pension insurance company.
EBICA says other multinationals are "sure to follow" though Lallier declined to name those the firm is working with.