Swiss pharmaceutical group Roche does not plan to take advantage of the IORP Directive and set up any pan-European pension arrangements because there is a lack of credible products available, according to the head of its global benefits management. Speaking at the Multi Pensions 2007 conference in Amsterdam, Roelof Kistemaker said Roche had not set up any cross border pension arrangements yet – and is not likely to be one of the first. ‘If one member of the board of directors asked for a pan-European scheme we would do it but we would not be number one in the list,’ he said. ‘I have not seen a decent case put forward by anyone yet,’ he said.
The IORP Directive, which is in place virtually all over the European Union, encourages the set up of cross-border or even Pan-European pension schemes.
This legislation however has actually prompted Roche to close a cross-border pension arrangement which the pharmaceutical company used to run for the UK and Ireland. The reason was that the transposition on the IORP Directive in the UK requires that schemes operating in any way other than purely domestically have to be fully funded at all times.
Roche however has pooled the assets of pension schemes in Luxembourg, Switzerland and Germany worth a total 6 bln sfr in a bid to cut costs.
Kistemaker told Thomson Investment Management News that the pooled resources are managed by UBS and are invested in 10 different investment strategies including foreign and Swiss bonds and equities.
He said Roche would finance more pooling arrangements in the future, but only if it makes financial sense to do so.
Kistemaker said the most difficult aspect of managing a pan-European pension arrangement is not the pooling of assets but managing the differences between different legal systems and the various definitions of pension schemes, especially when it comes to defined contribution schemes.
And even if Roche managed a pan-European scheme, it would still have to deal with other pension schemes based outside the EU.
‘What you do in Europe is not necessarily a solution in the USA or in Asia,’ he said.
Roche’s global pension assets amount to 11.6 bln sfr, while its liabilities are at 14.5 bln sfr.