ExxonMobil is far from the first multinational to choose Belgium and Flanders as a home for their pan-European pension fund. Euroclear, Johnson & Johnson, BP and Dupont have already transferred their funds from the Netherlands to Belgium. “The main reason for the transfer is operational efficiency and cost control,” asserts Ann Wurman, spokesperson for ExxonMobil. By integrating different national pension funds into a single pan-European fund, multinationals can cut signification costs.
Headquartered in the US, oil and gas giant ExxonMobil is creating the largest pension fund in Belgium and Flanders as a region. The company is transferring EUR 2.5 billion in pension reserves for its 5,000 Dutch employees into a pan-European fund located in Belgium.
“Since a new legal framework was created in 2017, Belgium has become an attractive place for setting up a pan-European pension fund,” adds Philip Neyt, chairman of PensioPlus, the Belgian association for pension funds. “Thanks to that legal framework, companies can easily include the social and labor legislation from other countries. Zooming in on the ExxonMobil, this means that the Dutch employees of the oil and gas company maintain the same rights as before.”
In 2016, an additional law was approved regarding the withholding tax exemption on pension funds for people living outside of Belgium. This was already offered, but activating it required a heavy administrative process. The new measure, however, significantly cuts the red tape involved.
When it comes to regulation, Belgium offers another benefit for companies looking to establish a pan-European pension fund. “The Belgian regulator – FSMA – is by no means less stringent than regulators in other countries,” says Jan Longeval, member of the board of directors at Bank Degroof Petercom, the Belgian market leader in asset management for pension funds. “The difference is that Belgium has a more pragmatic regulatory framework in place.”
Specialists predict that an increasing number of pension funds will be transferred to Belgium in the near future. “Various big projects are being prepared as we speak,” adds Philip Neyt. “By 2025, Belgian pension funds are expected to handle many more times the approximately EUR 25 billion they currently manage.”
With Dutch as its official language, Flanders (Dutch: Vlaanderen) is the northern region of Belgium. The capital of both Belgium and Flanders is Brussels.