Pension & Co
The introduction of the policy guidelines of corporate governance in 2007 has caused pension funds in Belgium to move towards more professionalism. In 2019, the Belgian government has further increased regulatory requirements with the implementation of the IORP II, the new European directive for IORP’s.
Smaller pension funds, however, do not always have the necessary budgets and time investment to comply with the ever-increasing requirements. Regulatory requirements continue to put pressure on the financial results and ask too much management time in the sponsoring undertakings.
The Multi-Employer fund ‘Pension & Co IORP’ offers the perfect solution to respond to these challenges. Pension & Co allows you to not only maintain the benefits of a pension fund (flexibility, transparency, private investment policy, full allowance of the return) but to also reduce the extensive overhead burden and corresponding budgets.
Structure and organization
A Multi-Employer fund is an autonomous pension fund set up under the legal form IORP (Institutions for Occupational Retirement Provision, the Belgian legal structure for pension funds) in Belgium and under the authority of the regulator FSMA. Within this structure, several ‘separate funds’ can be created. Assets of the different sponsoring undertakings are statutory and determined separately. This means that there is no solidarity even when there are shortages in another separate fund, and that each individual plan has its own, private and independent asset allocation.
Multi-employer versus own IORP
The main benefits to move to the Multi-Employer Pension Fund Pension & Co are the following:
- Time-saving: no more organizing and preparing Board of Directors meetings, no need to follow up on the governance principles, statutory organization, etc.
- Financial: general management costs and costs regarding the control functions and governance principles are dispersed.
- Continuity: assured continuity towards affiliates and asset management
- Flexibility: the financing plan, the investment policy and reinsurance can be filled in by the Plan Sponsor. The return and inherent risks can be monitored by (personal) insights.
- Transparency: each Separate Fund has its own accounting and a full transparent reporting. The reporting on the level of the General Assembly, representing all Plan Sponsors, is limited to a consolidated reporting.
Impact on the organization of a separate fund
Governing bodies within Pension & Co:
The general meeting represents all participating companies and is held once a year at least.
The Board of Directors is composed by persons directly or indirectly related to participating parties, either as a partner, as a participant or as a specialist, all with the relevant professional experience. The Board will contain at least one independent member.
Each separate fund can establish operational bodies. These bodies are in charge of aspects which are specific for each Plan Sponsor: an investment committee and a daily management committee. All members of these committees are to be nominated by the Plan Sponsor.
The possibility exists to organize a Social Committee per participating company, in which employer and employees are represented. Aspects with regard to regulation can be discussed here.
We refer to the bylaws of Pension & Co IORP for more detail on this subject.
The external control functions are:
Accredited auditor
Internal auditor
Compliance Function
Actuarial Function
Risk Manager
The control functions are centrally organized, allowing costs to be spread over the different participating companies. If there are plan-specific checks, these will be charged separately. PwC (accredited auditors), BDO (internal auditor), AG Insurance (compliance function) and Conac (Actuarial function) have been appointed for the control functions. AG Insurance assumes the risk management function.
The DPO function (GDPR) is taken up by Conac in close collaboration with the DPO office of AG Insurance. The DPO responsible will also perform the function of safety consultant with regard to the minimum safety standards as published on the site of the Crossroads Bank for Social Security.
Pension & Co also benefits an ISAE 3402 certification (type II) applicable with a very extended scope. The ISAE 3402 certification is asserted by EY.
Joining Pension & Co
An extensive know how to support a smooth transition to Pension & Co:
Switching from a proprietary IORP to a multi-employer solution needs clear guidance and counseling. Pension & Co has an extensive expertise and collaborates with a number of partners to assure a smooth transfer.
Together we will draw up an action plan taking into account all specific aspects of a separate fund, your timing and all regulatory and legal requirements.
Pension & Co participation also needs to be formalised. Hereunder you can find an overview of the documents and policies related to Pension & Co participation:
Joining Pension & Co
General documents
The statutory and general documents such as the management agreement, the financing plan and the Statement of Investment Principles are drawn up centrally. There is however an addendum per separate fund for each of these documents, which guarantees the complete privacy of the company’s specific agreements.
Governance Principles
Governance principles, such as for example the business continuity policy, internal and external communication, outsourcing policy, charters for internal audit and compliance, are organized centrally. Specific issues such as a signature or a payment authority are developed on the level of each plan and separate fund.
Outsourcing
A complete outsourcing will be pursued.
For the outsourcing of the actuarial services, accounting, pension administration, governance and statutory administration, partners will be appointed. Partnerships will be evaluated and reviewed yearly.
Within Pension & Co, each Sponsoring undertaking needs to make his own decisions concerning the outsourcing of responsibilities related to the custodian and the asset manager, respecting the central outsourcing policy.
Reinsurance
The reinsurance of certain coverages can be done by a reinsurer, which is appointed on demand of the Sponsoring undertakings.
Contact
More information?
For more information on Pension & Co, please fill out the form or contact one of our team members.
Pension & Co
Instutution for Occupational Retirement Provision – Allowed by Royal Decree on 27 june 1991
FSMA Code 50.429
Company Registration Number 0443.872.196