EUROPE- Multinational companies would welcome the opportunity to have a single fund to finance the pension obligations of their entire employee population in the European Union, according to a new survey.
The survey by Hewitt Associates found that a third of the respondents were found to have already considered a single pension fund while another third were 'looking into the idea'.
Most respondents had also taken concrete steps towards establishing a preferred list of EU pension providers such as investment managers, actuaries and administrators.
The main advantage to pooling pension assets was thought to be more efficient plan governance, while discriminatory tax regulations and local resistance from employees, plan trustees and governments top the list of perceived hindrances.
Tim Reay (pictured), international pension consultant at Hewitt, said: It is clear that borderless pension funds are already on many multinationals' agendas, as is the desire to regionalise their pension plan governance, providers and day-to-day management.
“For the multinationals surveyed, the UK is top of the list for most companies as the ideal location for pan-European management of their pension fund assets. However, as other EU countries devise attractive local regimes, this may change.
Most respondents felt that a flexible regulatory environment was the most important factor when selecting the location of a pan-European Institutions for Occupational Retirement Provision, with three quarters of respondents (73%) citing it as one of their top three priorities. The expertise of local providers and a lack of fund investment constraints were also considered to be particularly important.
The survey of 22 companies currently operating pension plans in 20 countries across Europe was conducted to gain a better understanding of attitudes towards the recently adopted European Pension Fund Directive which is set to be implemented in individual EU Member States by 2005
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