LIECHTENSTEIN/ GERMANY - The Liechtenstein-registered Pensionsfonds by German insurer LV 1871 attracted €29m in its first year of existence.

Founded in spring last year, the Pensionsfonds finalised the EU notification procedure in September and targets German companies.

Nine companies with €3.2m in assets had signed with the new provider at that time but the number of clients has grown since then to "42 German mostly medium-sized companies", bringing about 1,000 members to the Pensionsfonds, a spokesperson for LV 1871 confirmed to IPE.

"The Pensionfonds has exceeded our expectations five times," said Karl Panzer, chairman of LV 1871.

At the time the fund was set up, company officials said they were seeking to raise €100m in assets over the next three years.

The insurer chose Liechtenstein - a principality between Switzerland and Austria - as a domicile for its cross-border pension operations because of the proximity and the non-existence of a language barrier. (See earlier IPE article: German insurer picks Liechtenstein as base for euro pensions)

The apparent advantage to using a Liechtenstein-based Pensionfonds vehicle is they can be more individually tailored to companies' needs thanks to more flexible regulations, according to LV1871.

The insurer argues there are less stringent regulations regarding underfunding, guarantees and payments by the employer.

However, since LV 1871 set up its Pensionsfonds in Liechtenstein, German versions of this vehicle have been granted additional flexibility by the German government, as Pensionsfonds are now allowed to fall to a 90% funding level which is 5% more than the current 95% mark. (See earlier IPE story: Pensionsfonds gain more freedom)

If you have any comments you would like to add to this or any other story, contact Julie Henderson on + 44 (0)20 7261 4602 or email julie.henderson@ipe.com

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