THE EDITO

Network of multinational companies with broad base employee share plans

On 20 November 2015 a first roundtable for multinational companies was organised in Utrecht, The Netherlands. This roundtable was an initiative of SNPI and organised together with the other national organisations AGP Germany, ifs Proshare UK and IAFP.

Up till now there was no such thing as an exclusive network, just for multinational companies. In the international field of employee share ownership there was a clear need for a network and meetings just for the multinational companies. Meetings where companies can share information and learn from each other.

This first roundtable was a big success and the participating companies and organisations agreed to continue organising roundtables in future and create a confidential network with information on each company and the different countries.

This network of multinational companies has two clear objectives:

1.   To create an network of Multinational companies with broad based employee share plans

2.   Exchange and share information on implementing employee share plans in other countries

Who can join? And what are the conditions for participating?

-      Multinational companies with broad based employee share plans are able to join. But they can only participate on invitation by the organisation.

-      The company should be a member of one of the national organisations SNPI, ifs proshare, AGP or of the IAFP platform.

-      If a company joins they declare that they are willing to share information on their ESO-plans.

-      Information received at the roundtable will be treated confidentially

-      Consultants, advisors, lawyers and others with a possible commercial background are not able to join the network and not able to attend the roundtable.

-      It is an exclusive network and on invitation only.

-      If you are interested in joining, you can send a request to Pascale Nieuwland-Jansen of SNPI (mail@snpi.nl)

Report on the Cape Town Workshop

The AIPF/IAFP organised a workshop on aspects of financial participation (EFP) as part of the programme for the 17th World Congress of ILERA (International Labour and Employment Relations Association) in Cape Town, South Africa, on 7 September, 2015.

This event resulted from an interest by a number of contacts in South Africa to set up a national employee share ownership association, with the assistance of the AIPF/IAFP.  Secretary General, Jean-Michel Content, chaired the workshop. The presenters included

Ø  Dr Ulke Veersma, Greenwich University, UK

Ø  Prof Erik Poutsma, Nijmegen School of Management, Radboud University, the Netherlands (see slides)

Ø  Prof Andrew Pendleton, University of Durham, UK (see slides)

Ø  Mr Tendani Nelwamondo, South African Industrial Development Corporation (see slides)

Ø  Ms Lauren Rawlings, a business consultant based in Johannesburg.

Their presentations dealt with the current situation with financial participation in the EU and in South Africa and the challenges, barriers, opportunities and benefits of EFP.  The discussion following the presentations looked at how the concept of financial participation, in particular employee share ownership, can be promoted and enhanced in South Africa. Kevin P O’Kelly, a member of the AIPF/IAFP Executive Committee, summed up the key points and related some of the challenges to the diffusion of EFP to experiences in the EU, such as:

Ø  The need for research into what is already happening in South Africa

Ø  Getting both employer and trade union organisations on-side and committed and building levels of trust in employment relations

Ø  Engage the government in providing tax incentives

Ø  Set out what role a national association would have in all of these issues.

Kevin O’KELLY

 
17th ILERA World Congress : Cape Town 7-11 September 2015

Some months ago we have had a discussion around setting up an association or a centre to promote financial participation and, in particular, employee ownership plans in South Africa. The AIPF/IAFP is committed to supporting this new organisation and we thought one way to do this would be to hold a workshop during the Congress which theme was “The Changing World of Work: Implications for Labour and Employment Relations and Social Protection”. The Congress’s Organisers kindly agreed to host such a workshop which took place on the 7th afternoon. We enjoyed our workshop and we think it was a successful event and our exchanges gave us some ideas to follow up on to realise the goal of establishing a South African financial participation association.

Presentations were delivered by Erik Poutsma and Ulke Veersma, Andrew Pendleton, Tendani Nelwamondo (Industrial Development Corporation- fully owned by the South African Government) and Lauren Rawlings (Consultant in Johannesburg). The workshop was co-chaired by Kevin O’Kelly (convenor) and J-M Content. 

Jean-Michal CONTENT (secrétaire général)

 
EMPLOYEE SHARE OWNERSHIP IS MOVING FORWARD IN AUSTRALIA
 
Employee Ownership Australia’s annual conference and awards ceremony took place in Melbourne in May against the backdrop of important policy developments in employee share ownership.  The conference focused on share scheme design and employee behaviour, drawing on information from several national contexts.  IAFP Executive Members Jean-Michel Content, Nelly Voyeux, and Kevin O’Kelly stayed up late to participate by video-link, providing information to delegates on the financial participation scene in France and Europe more generally. Professor Andrew Pendleton (University of Durham, UK), who was present at the conference, talked about UK share ownership schemes and research on employee behaviour in share plans. Other sessions examined changes in the regulation of Australian share ownership schemes by the Australian Securities and Investment Commission, and discussed employee communications in Australian companies.  Computershare reported on research on share plan participation conducted by the London School of Economics.  Tony Smith MP highlighted the support of the Australian Government for employee share ownership.  The conference concluded with the presentation of awards by Norah Seddon (PWC) and Andrew Pendleton to Australian and New Zealand companies for excellence in operating employee share ownership plans. 

A week after the conference, the Australian House of Representatives passed, with cross-party support, new legislation to promote employee share ownership plans in SMEs.

For information on the conference programme go to

For further information on the award winners go to

Andrew Pendleton

Professor of Human Resource Management

Durham University Business School

University of Durham

SMEs and Universities in Ireland   
 
Recent research has shown that SMEs and Universities were failing to engage. It was assumed that the fault lay with the Universities but it soon became apparent that the problem lay mostly with the SMEs.  
In an effort to bridge the gap between universities offering all sorts of support for research, development and innovation an Innovation Campus Bus Tour is to take place this week. The SME owners simply board the bus and are whisked off to University College Dublin where they will be given a background on why innovation is important and the supports that are available to them. Then it is on to Dublin City University where they will get an overview of the research that is happening there. Finally they finish the tour with a visit to Trinity College.  
The tour is most suited to businesses in the ICT, Life Sciences and Engineering fields and in one day SMEs will get a full overview of all the excitement that universities can offer.  
It is hoped that some, if not all, of the SMEs will engage with the universities and progress will be tracked post the event. If successful it is planned to run further tours.
George TUTHILL (IAFP/IPSA)
 
 
 
 

  Some twelve articles in favour of Financial Participation were agreed by the National Assembly when in a first instance, the Law for Growth and Activity, so-called “Loi     Macron” (cf. the detail in Appendix), was discussed.

  Since the 17th of March, the whole Law and the possible amendments proposed by the Senators will be discussed by the Senate Commissions. The Senate will then publically debate of the so amended text between the 7th of April until the 6th of May (following the present Diary).

  Afterwards this text will be submitted to the National Assembly. If the mixt Parliamentary Commission composed of nine Deputies and nine Senators cannot find an agreement on a final text, the Government may decide to keep the first text as approved by the National Assembly in the frame of the application of the “Article 49-3” of the French Constitution which was used previously. In such a case the Law will be finally adopted without taking in consideration any of the amendments proposed by the Senate.  

  The next phase, mid-June, consists in a review of compliance of all the articles with the French Constitution by the Constitutional Council. Finally the Law could be officialised maybe mid-July.

Daniel GEE - Délégué Général de FONDACT

 

A NEW YEAR MESSAGE FROM THE PRESIDENT OF THE INTERNATIONAL ASSOCIATION FOR FINANCIAL PARTICIPATION

FINANCIAL PARTICIPATION IS GOOD

The concept of employers sharing enterprise profits with workers is good.  It is good for the employer. It is good for the worker.  It is good for the local and   national economy. Financial participation has proven to be good since the inception of the industrial revolution over two hundred years ago.  In fact, it has been   so good, that some countries, such as the United States of America have adopted financial participation programs as part of the accepted national retirement   scene.   In the US, a qualified, employer sponsored, financial participation program provides:

·         An income tax deduction for the employer contribution,

·         No income tax to the employee at the time of contribution,

·         Tax subsidized employee contributions,

·         Tax deferred accumulation of income, and

·         Preferential income tax treatment on death or retirement distribution.

Even without government tax support, all types of financial distribution programs are good.  This includes pure sharing of cash profits with employees; sharing employer stock with employees through an employer contribution; subsidized employee purchase of stock; matching employee contributions with an employer cash or stock contribution; and both current or deferred distribution of such financial participation.  Combinations of the above types of financial participation are recognized by many countries as a socially desirable means of either wealth accumulation or retirement savings for workers.

Following are the top five reasons financial participation is good:

  1. Financial participation programs are good for the employer because they attract and retain quality workers. Costs are reduced because the need for finding and training new employees is less.
  2. Financial participation programs are good for the employer because workers are happier and more productive thus leading to greater profit for the enterprise.
  3. Financial participation programs are good for the employee because they assist in wealth accumulation for the employee.
  4. Financial participation programs are good for the local and national economy because they increase productivity of the employee and profits for the enterprise. They make employers more competitive in the local, national and world economies.
  5. Financial participation programs are good for the national economy because they make workers more self-sufficient through the wealth accumulation of plan participants.

There is likely no one type of financial participation program which is most efficient for both large and small and medium sized employees under every country’s tax laws. That is also the best attribute of a financial participation program.  They are flexible and adaptable and can be custom designed for each size and type of employee in each local tax jurisdiction.  Where the local tax laws provide incentives and subsidies for financial participation programs, the benefits of such programs for employers, workers and the local economy are magnified.

Financial participation is good.

The International Association for Financial Participation (www.aipf-association.fr) has extensive resources in support of financial participation, and a large network of associations, companies and academics which support financial participation.  I urge you to visit the website to see the bountiful resources available.  We also welcome your e-mail, telephone or written inquiry.

Respectfully with good wishes for the new year,

David Hildebrandt, IAFP President

Helping employee financial participation to boost economic growth

The 28th of November, the ESOP Centre organised a one-day conference entitled: “Shares into Ploughshares: Helping employee financial participation to boost economic growth”.

Delegates from seven EU nations, who gathered at Linklaters in London, heard a series of informative presentations on how employee share ownership could provide a range of potential solutions to the haemorrhage of jobs, future careers and hope from local communities in the bulk of member states.

Mr. Malcolm Hurlston CBE, who chaired the Conference, said that the Centre’s programme asked to what extent employee share ownership could preserve or even increase employment in companies, while at the same time preserving social values.

Among the issues discussed were the use of ESO in business succession; community shares in micro businesses; the track record of public sector mutual; whether union members at the Royal Mail would one day enjoy a collective voice in its affairs throughout share ownership and what ESO progress was being made in France, Germany, Italy and Spain.

This Conference was the main (and final) event of a European Commission-backed Project managed, on behalf of the ProEFP network, by CISL, the major Italian trade-unions Confederation.

The IAFP which is a member of the ProEFP network and which was a Partner in this Project was represented by Kevin O’Kelly and Jean-Michel Content.

40th anniversary of ERISA legislation

TO THE MEMBERS OF THE UNITED STATES CONGRESS:

This month is the 40th anniversary of landmark benefits legislation, the Employee Retirement
Income Security Act of 1974 (ERISA). Over the years, there have been many changes to the law
and many, many regulations that have refined and reshaped the statute. However, for the
thousands of employers who sponsor retirement plans, there has been a consistent theme -
strengthening the retirement security of American workers.
 
The undersigned organizations, representing plan sponsors, service providers, and plan
administrators who deliver retirement benefits to millions of American workers, ask you to join
us in celebrating the passage of this law and the success of the private retirement system that has
been created around it.
 
The employer–provided retirement system has been overwhelmingly successful in providing
retirement income. In 2011, private-sector employers contributed over $255 billion into their
retirement plans and paid out over $470 billion in retirement benefits. We support the current
system and encourage Congress to maintain the flexibility that allows employers to provide
benefits tailored to their workforce. Depending on the size, industry, and demographics of their
workforce, private-sector employers participate in a wide variety of retirement arrangements:
traditional pension plans, cash balance plans, pension equity plans, profit-sharing plans, 401(k)
and similar plans, money purchase pension plans, 403(b) plans, IRA-based plans, multiemployer
plans, and multiple employer plans. This variety demonstrates the need for flexibility to meet
the needs of various workforces.
 
In honor of the 40th anniversary of ERISA, we are providing 40 facts about ERISA and the
private employer-provided system as an attachment to this letter.
We are committed to working with Congress and the Executive branch to ensure that ERISA
continues to provide a voluntary and flexible employer-provided retirement plan system that
benefits American workers.
Sincerely

Do not miss THE EVENT: Frankfurt October 23rd  

Conference: Employee Financial Participation in Europe and in Germany

Jointly organised by AGP (Bundesverband Mitarbeiterbeteiligung) and IAFP (International Association for Financial Participation)

AGENDA - REGISTER NOW

Interview with Dr. Heinrich Beyer, Managing Director of the German National Centre for Employee Financial Participation – AGP

Heinrich Beyer is committed to the dissemination of employee participation Germany. In the German Federal Government he sees little interest. "Other topics have more priority in Berlin."
From WILHELM HÖLKEMEIER, Südwest Presse 16th May 2014. Translation by AGP.

The Awards Ceremony of the second European Social innovation Competition

This Ceremony took place in Brussels the 20th of May, as a conclusion of a 2 days Social Policy Innovation Conference launched by the DG Enterprise and Industry of the European Commission.

International conference, York, April 2-3 2014

The two day Conference which took place in York on April 2-3, 2014 was organised by the White Rose Employee Ownership Centre, a common creation of the three Universities of York, Leeds and Sheffield.

IAFP was represented by Kevin O’Kelly and Jean-Michel Content, who made a presentation on “Policies and attitudes to financial participation in the EU”.

English