RETIREMENT FUNDS WILL MERGE

UNILEVER is about to start pooling its £12bn pension assets, in a move that will unite many of the firm’s 98 schemes around the world.

Having resisted calls to unite its Anglo-Dutch business structures, the measure to bring together its pension funds came as a great surprise. It is a decision that will reverberate around the fund management industry for many years.

Initially the ‘ Univest’ pool will take £1.5bn of assets from the UK and Dutch schemes, which have total assets of £6.7bn. As more of the consumer group’s global funds join, the assets are expected to swell to up to £3.4bn.

The offshore fund is the first of its kind in Europe to pool pension assets from around the world. It has taken four years of research to get it off the ground.

Luxembourg- based Northern Trust, which will manage the fund, and Mercers, the fund’s investment advisers, reckon the new scheme will cut management risk, boost returns and result in significant savings as economies of scale kick in.

Fund managers in Europe have previously proposed plans to develop Europe- wide pension funds that allow savers to move around the EU without being constrained by the existing patchwork of pensions rules.

Under the Univest model, the assets of each individual scheme will be ringfenced and local taxes will apply.

But Unilever admitted that some pension funds, such as the 19 schemes running in India, will not be able to participate.

‘ There is an offshore investment ban in India and the United States does not recognise this type of investment pooling,’ a spokesman said.