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Major milestone completed for the RESAVER pan-European pension plan

April 2016

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(c) European Commission
(c) European Commission

Despite moving at what may seem sometimes as a glacial pace, RESAVER, the pan-European pension plan project, appears to have reached a major milestone. RESAVER, which is set up as a defined contribution (DC) scheme that will provide second-pillar pension benefits, selected its key operational components – namely its third-party service providers – in April 2016, paving the way for its launch.

BlackRock has been selected as the asset manager while Italian TPA Previnet is to be in charge of member record-keeping, web services, and central reporting. KPMG was appointed RESAVER’s external auditor, Deloitte its internal auditor, BDO its accountant and Lydian its compliance officer. The pension fund said it hoped to have selected an actuary, a custodian and a reinsurer by the end of April 2016.

Now that the providers have been chosen, a fee structure is to be negotiated, and even though being reserved for E.U. researchers and research institute employees, RESAVER’s significance is that it may serve as a blueprint for other pan-European pension plans. RESAVER will also include a large set of online functionalities and learning tools, such as risk profilers and country-specific pension projections. Asset allocation details for the fund were still being discussed, with the major challenge being the necessity to accommodate the investment regimes of the various EU member states, as they must be met for each fund member in each country. The fund is to include a life-cycle model, as well as a model of free choice for individual members.

RESAVER is set up as a Belgian OFP. Approval from Belgium’s regulator FSMA is expected in the third quarter, 2016. In terms of possible domiciles and structures, Belgium’s OFP, a trust-based arrangement in Ireland or a SEPCAV and ASSEP in Luxembourg were considered. The choice of a Belgian OFP was explained by a supportive regulator, complete freedom in respect of investments and financing and a zero tax base.

The European Commission has pledged to finance the set-up of the fund for four years until 2018, drawing on the Horizon 2020 funds.

Initial contributions are expected to flow into RESAVER in late 2016 from the Central European University in Budapest, the Elettra Sincrotrone Trieste, and the Istituto Italiano di Technologia. The other 20-odd members will make use of RESAVER at a later stage. All research institutes – both in the private and public sectors – can join the group and contribute to the RESAVER fund.

Aon Belgium had been awarded a four-year contract in January 2015, worth €4m for providing “support services” to the RESAVER project. The costs, along with other “initial set-up costs” over the first four-year period will be covered by the European Commission. Aon estimated the initial costs to be €3m for the first three years of the scheme. It said it would take 15 years for the fund to finance itself.

The IORP was to be rolled out to EU member states in 2015 and then be extended to include the whole of the EEA by 2018, but there appears to be a six- to nine-month delay in its implementation.

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