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A step closer to European pensions

July 9, 2010

Since the financial crisis, companies are focusing more on improving the control and management of their pension plans. Asset pooling is helping international companies of all sizes to better manage their pensions across borders.

Combining pension plans in Europe

In Europe, many companies have already centralized some aspects of their employee benefit schemes. But, differences in employment and tax laws have made managing pension plans in different European countries complicated.

Only the largest multinational companies have the resources to take the first steps towards pension integration by combining their pension assets across borders. However, the benefits of cross-border asset pooling will also work for smaller companies operating internationally.

Benefits smaller companies too

For all companies, the benefits of asset pooling are better governance, a firmer grip on financial risk, increased operating efficiency and potentially improved investment returns.

“In the past, small and medium-sized multinational companies have not been able to benefit from asset pooling because it did not make financial sense to design and implement their own solution. With the launch of Aegon’s multi-client solution, asset pooling came within the reach of international companies of all sizes,” says Alexander van Ittersum, author of Aegon’s report ‘Asset Pooling Comes of Age’.

“Many companies may feel they lack the expertise, management capacity or assets to introduce a more integrated approach to pensions,” says Van Ittersum. “But, evidence suggests that smaller and medium-sized companies can benefit without needing to have billions of euro in assets.”

Knowledge and expertise

Aegon together with Citi has developed a ‘multi-client’ asset pooling platform that is capable of handling the diversity of pension plans across Europe. Aegon currently offers asset pooling to pension plans in France, the Netherlands and the United Kingdom, and is extending its multi-client platform to Switzerland, Germany, Ireland and Denmark.

Aegon Global Pensions has released a white paper titled ‘Asset Pooling Comes of Age’ discussing issues that multinational companies face in managing their pensions. In the report, Aegon explores different solutions and provides guidelines on managing, investing and implementing asset pooling for companies of all sizes.