Fondaereo, the Italian pension fund for pilots and flight attendants, has identified Ireland as a “host country” to set up a cross-border pension scheme, it said in its 2023 annual report.
The scheme has conducted a gap analysis on a potential Italy/Ireland cross-border scheme, and the first results highlighted “several points in common” concerning activities and obligations of the scheme that are necessary to operate in both countries.
Fondaereo’s plan to become a cross-border pension fund, with Italy as “home country”, and then start operations in other countries (as host countries), appears feasible, keeping in mind different social security and tax regimes in Europe, and the costs of running a scheme in a host country, it added.
The Italian pension fund is also looking closely at investment options, knowing that in Italy the so-called ‘Bilanciato’ (Balanced) sub-funds, investing in equities and bonds, are common, while abroad members are familiar with schemes offering life cycle options, it added.
Fondaereo has conducted the study to set up a cross-border scheme as a large number of its members are foreign citizens, very mobile, often working in foreign countries, it said.
The scheme has also studied the possibility of introducing a Pan-European Personal Pension Product (PEPP). It has started a survey, asking members if they have worked abroad, and if they are members of a pension fund in other countries, to understand how many members are interested in transferring accrued assets to Fondaereo.
From 1 July, the scheme opened its doors to the pilots of Spanish budget airline Vueling, who can join Fondaereo, paying the severance pay to the pension fund, and making voluntary contributions.
The plan to become a cross-border scheme runs in parallel with a review of the scheme’s investment policies for its new sub-funds ‘Equilibrio’ and ‘Crescita’.
The pension fund restructured its investment sub-funds, reducing them from four to three – ‘Equilibrio’, ‘Crescita’ and ‘Garantito’ – and started new investment options.
It has added US government bonds, inflation-linked European government bonds, investment grade corporate bonds in US dollars, and emerging market equities as asset classes under the ‘Equilibrio’ and ‘Crescita’ sub-funds.
In addition, the strategic equities allocation for the ‘Bilanciato’ portfolio has been set at 30%, and 70% for the ‘Crescita’ sub-fund.
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