EUROPE - Multi-national companies have begun moving their pan-European pension funds to Belgium following legislative changes brought in at the beginning of 2007, according to Deloitte.
Deloitte consultants told Global Pensions several large firms had approached them to carry out feasibility studies regarding moving at least part of their pension funds to a Belgian domicile.
This is despite moves by the Dutch government to curtail any such move on the part of Dutch multi-nationals.
Michel Mohr, partner, tax and financial services, Deloitte, explained: “A message was sent to employers from the government in the Netherlands saying they would still have to comply with Dutch pension fund legislation, even if they moved their pension funds to Belgium.”
Mohr continued: “Of course this was denied by the Belgian government, but it was enough to scare the unions, which have now taken a stance against any movement of pension funds.”
He clarified that as the multi-nationals themselves would not change states, national labour laws would still apply to the companies, but not pension funds.
Unlike arrangements in Luxembourg and Ireland, where companies are only permitted to shift assets, pension fund liabilities can also be moved to Belgium.
Deloitte estimated the whole process would take up to a year to complete, which was why there had been no completed transfers to date.
Ivan Eulaers, senior manager, enterprise risk services, Deloitte, commented: “It’s too early for some multi-nationals. I think we’ll see a lot coming back in a couple of years’ time to see if the moves that will have gone through have been successful.”
Belgian authorities have gone to lengths to stress the tax benefits for multi-nationals of moving pan-European pension funds to a sole host country.
In October, Global Pensions reported how a row had been sparked by a letter to the Dutch parliament from JPH Donner, Dutch minister for social affairs and employment, saying few pension funds would move to Belgium.
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