Making a splash in the pensions pooling pond

Dublin's aspirations to become the premier location for cross-border pensions pooling could see the creation of thousands of jobs.

Pensions pooling allows multinational companies to place their pension assets within one tax-transparent vehicle, thus avoiding the tax penalties of offering pension provision to employees in various countries.

Ireland is going for pole position, but isn't without competition. Its 'common contractual fund' (CCF) is embroiled in a battle with other jurisdictions to become the location of choice for pensions pooling vehicles. Luxembourg, with its fonds commun de placement (FCP) is the main rival, but strong recent pushes from the Netherlands (with its fonds voor gemene rekening) and Belgium (promoting its orgamisme de financement de pensions) have added an extra layer of competition.

So what edge does Ireland have? Well, it was quick off the mark in 2003 in establishing tax-transparent vehicles to hold pooled assets, and it boasts an impressive legal framework as well as having a readily available pool of talent and expertise through its existing position as a fund domicile.

Gavin Nangles, head of product development at State Street Ireland, says: "The provision for that type of product, together with the servicing capabilities in Ireland, makes us very attractive. There is also a great familiarity with Irish service centres from the firms that are interested in setting up these products."

Pensions pooling will draw on much of the existing expertise within the fund administration sector, but as firms jump into providing cross-border pensions, jobs will be created.

Gary Palmer, chief executive of the Irish Funds Industry Association, says: "There will definitely be jobs created because of this. We currently have 11,000 working in the investment funds industry. Will that rise to 21,000 or 120,000? Your guess is as good as mine."

While some of the other jurisdictions seem to be involved in a war of words - a director at the Dutch National Bank likened Belgium's marketing campaign to trying to sell a car using a brochure without any technical specifications - Ireland has been keeping its head down and honing the product.

Palmer says: "We don't have any god-given right to this business, so it's important we continue to work to ensure its success. Ireland has an established legal framework and an established reputation, so it's ours to lose.