EUROPE - European companies with offshore pension funds could be breaking the law, according to Deloitte Belgium.
Ivan Eulaers, senior manager Deloitte, told Global Pensions: "Following the 2003 EU directive on IORPs company pension funds have to be authorised in the state in which they are based. They can only be authorised if they apply local labour legislations."
Deloitte research stated: "In most cases those offshore schemes do not take the local social and labour legislation into account. Therefore, we even may conclude, that offshore pension vehicles are not permitted based on the European directive."
Eulaers explained Deloitte's research had only covered Belgian legislation, but due to the nature of the European directive, it could cover the entire continent.
He continued: "There is no easy solution for this problem as these pension schemes are usually set up by international companies for small numbers of staff, usually ex-pats. Setting up a new vehicle where the pension fund was originally based or in another European country would prove costly and time consuming."
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