LONDON - High profile and desperate, seeks willing partner for cross-border activity.
The European Federation for Retirement Provision is looking for a plan sponsor to help set up a new cross-border pension plan in Europe.
The move is a change in strategy for the EFRP, which has decided to launch a cross-border plan and test it in practice rather than wait for European politicians to put legislation in place.
The decision to go ahead and launch a cross-border pension vehicle follows growing frustration over the slow progress through the European Parliament of the long awaited European Directive, which would allow for such plans.
"We have reached the conclusion that we will not win this at the level of a technical argument," said Alan Pickering, the newly elected chairman of the EFRP.
The ideal guinea pig for the EFRP's European Institution for Occupational Retirement Provision - a prototype the group hopes may be included in eventual legislation - would be a midsized Irish company with between 20 and 30 people in non-domestic sales and marketing operations in the United Kingdom and the Netherlands, he said.
John Feely, chairman of the Irish Association of Pension Funds, Dublin, is leading talks with Irish, Dutch and U.K. regulators to get approval to start an EFRP cross-border plan and also is looking for a plan sponsor willing to be a guinea pig.
But he said it could take until April for a willing plan sponsor to step up to the plate and regulators to approve the arrangements.
He said he has spoken with a number of Irish companiesbut could not mention names at this stage.
The EFRP cross-border plan model is unusual in attempting to separate the regulation of the pension plan from its tax arrangements. The plan would be established and regulated in one member state, which would be designated as the home country. Separate sections of the plan would be created for employees in other member states, known as host countries, to ensure that local tax, labor and social laws were met. For the system to work, host-country regulators would need to approve the regulatory system in the home country.
Focusing on three countries
At this stage, the EFRP is focusing on launching the model in the United Kingdom, Ireland and the Netherlands because financial regulation among the three is relatively homogenous. Acceptance of the scheme across all 15 European Union member states, however, would be a leap of faith at the moment, said Mr. Pickering.
The EFRP would consider extending the project to include Belgium and Denmark, whose pension systems are not dissimilar to those of the Netherlands, Ireland and the United Kingdom.
"The EIORP holds out the prospect of fair tax collection for member states and a seamless structure for plan sponsors and members," Mr. Pickering added.
Small and midsized plan sponsors have more to gain from the EFRP's model, as some large companies and multinationals already have sufficient size to generate economies of scale in their Europewide pension arrangements, he said. These larger plans have been able to coordinate administration and benefits payment and negotiate preferred provider arrangements.
Mr. Pickering was concerned about ensuring the model is not interpreted as "U.K. pensions colonialism," as a number of EU member states had expressed a reluctance to follow the Anglo-Saxon model of pension provision.
"An Irish company in the driving seat could trigger less prejudice," he said.
The EIORP was unveiled last July by former EFRP Chairman Keen Van Rees.
At the time, the EFRP hoped the pensions directive would be passed into EU legislation relatively quickly, and the model did not generate much attention.
In its current form, however the draft directive fails to address the key issue of a tax framework for cross-border pensions, even though its holds out the prospect of a liberal pension regime and Europewide pension plans, said Mr. Pickering.
"One could argue that (the directive) delivers just about enough to see it through to the European statue books," he added.