EU must launch IORP ‘charm offensive’ on multi-nationals
Written by Theo Andrew
The European Union must launch a “charm offensive” on multi-national companies in order to increase the usage of employer controlled, cross-border pensions, or IORPs, it has been said.
Speaking at the Pensions Europe conference, The Future of Work and Pensions, last week, 7 June 2018, Eversheds Sutherland partner and head of pensions François Barker suggested that advertising IORPs as a solution to their global liquidity issue could be part of the solution.
Out of roughly 100,000 IORPs, just 83 are registered as cross border, and of those 26 are based in the UK.
Barker said: “One of the bars to IORPs is lack of knowledge, and because they are run through employers it’s about advertising their existence to employers, to multi-nationals, as a part solution to their global liquidity issue.
“It won’t solve it all but it will get them partway there. It’s a charm offensive by the EU law makers to the companies who might make use of them.”
The main challenges of creating an effective IORPs are the lack of knowledge, the “hard to shift” heritage of member states and companies searching for a “global rather than a European solution”, Barker said.
In addition, he added that Brexit will have an impact, but that it will not be “fatal”.
Despite this, 2016 saw six new multi-jurisdiction IORPs set up, an 8 per cent increase, showing that the market is moving in the right direction.
According to Barker, currently 15 per cent of European workers are in an IORP, meaning there is “colossal scope for penetration”.