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Northern Trust deploys pooling solution for US Erisa plans

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Northern Trust has added the first pension funds governed by the US Employee Retirement Income Security Act to its cross-border pooling platform.

Northern Trust has added the first pension funds governed by the US Employee Retirement Income Security Act to its cross-border pooling platform.

The US pension plans invest in a US limited partnership, along with Canadian employee pension and welfare plans, with approximately USD4bn in North American and European equity investments.

"Northern Trust’s innovative pooling platform assists in streamlining operations while minimizing the negative financial impact of international tax drag," says Peter Cherecwich, chief operating officer for corporate and institutional services at Northern Trust. "Plan investors and their beneficiaries continue to receive the favorable withholding tax rates to which they are entitled under double tax treaties, as well as the benefits of more efficient and effective investment operations at the fund."

Northern Trust developed the first custody and fund accounting platform for cross-border pooling to help multinationals achieve efficient management and appropriate risk control for their global pension plans.

"We are excited to work with US pension clients to set a new standard for Erisa plan investment management efficiencies and operations," says Marty Campbell, North American cross-border pooling product manager for Northern Trust. "Erisa plans face significant regulatory oversight, and Northern Trust’s pooling platform makes it easier for our clients to meet that challenge. In addition, our product leadership in this area will assist multinationals in offering a consistent investment strategy across plans in the US and outside the US, while achieving efficient investment operations which, in turn, will provide significant benefits to pension beneficiaries and plan sponsors."

Northern Trust has a US patent pending for innovations in fund administration and custody which allow multinational corporations and asset managers to pool pension assets from multiple country plans while using the tax treaty rates available for retirement plan investors.

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