An important contribution to the process of pooling assets was outlined by Claude Zimmer, partner in Pecoma International. He presented a summary of the multinational pension legislation that came into force in Luxembourg this month. The new law has introduced two new fund vehicles for the pooling of assets.
The société d’épargne-pension à capital variable, or SEPCAV, is suitable for DC schemes operating with a company structure along the lines of the SICAV. Scheme members are shareholders in the company, entitled to capitalised benefits on retirement, as a lump sum or instalments. The association d’épargne-pension, or ASSEP, is suitable mainly for DB schemes. The structure is of a non-profit organisation, as beneficiaries are creditors of the company and can receive fixed payments as an annuity or as capital.
The structures depend on the use of double taxation treaties to ensure tax neutrality, and also provide the flexibility to conform with national practices. Zimmer said the structures are designed to promote the free movement of services within the European Union by providing a solution to the problem of mobile employees. However, the new legislation requires a Luxembourg-based custodian, which, delegates said, is against the principle of open competition within the EU. Zimmer said the Duchy is capitalising on the experience of the SICAV and stressed there is no requirement for the asset manager to be Luxembourg-registered, allowing for free and open competition.
The SEPCAV and ASSEP structures were seen by many as the most important step in the development of a pan-European approach. However, it was widely felt that until there is European Commission action on the problem, there is little incentive for these schemes to gather momentum.

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