Unilever has become the first multinational company to set up a Luxembourg based umbrella fund for its expatriate employees under last years ASSEP/SEPCAV pension investment fund legislation.
Phillipe Leonard, director of consulting insurance and pensions at PricewaterhouseCoopers (PWC) in Luxembourg, advisers to the project, says the pooled plan is set up as a defined contribution (DC) Luxembourg ASSEP – Association d’Epargne Pension, in which the beneficiaries are creditors to the fund not shareholders as with a SEPCAV.
“This plan offers more flexibility to Unilever ex-pats. It is a DC arrangement with death and disability risks covered and members can choose to take lump sum or an annuity.”
The fund will have three administrators and six associate founders from Unilever. “As Unilever employees are world-wide it would have been difficult to choose the right representation for a SEPCAV. It helps that the members are just creditors so they have the same tax regime.”
Leonard says Unilever was attracted to the ‘European’ aspect of Luxembourg, as well as the number of double tax treaties the country has. “This means that it has better taxation for revenues than, say, an offshore trust.”
Leonard says he is seeing interest in similar projects from other firms in Holland, France and Spain. “The ASSEP used here is a very standard vehicle. What was really important was that we could go move quickly with the product and that it was the first international pension fund under the ASSEP and SEPCAV law. “For us it is good because Unilever has a great name and this will give ideas to other groups to consider these issues.”
Angela Docherty, senior corporate investment consultant at Unilever, comments: “Basically the arrangement will offer pooled fund options for some ex-pats with our preferred provider investment managers.
Docherty says Unilever has selected two of its preferred providers to manage the funds to begin with, although she declined to name them. “Because it is a start-up operation, you’re not talking about huge pools of cash so we have only selected two to start with – one for equities and one for bonds.
“What we are trying to do is build a fund which will meet the needs of our mobile workforce in the future. Long term it could involve a lot of ex-pats. We have an existing ex-pats fund but this is just moving into the new world. I don’t expect we’ll have any more than 25 members in the first year.” Hugh Wheelan

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