The company’s new European Financial Strategy Group, which has teams in Ireland, Germany, the Netherlands, Switzerland and the UK, is being headed up by Mick Moloney.

The group’s aim is to find ways of agreeing with fund trustees on long-term sustainable funding levels, he said. “It begins before clawing back surpluses. If you find yourself with a large surplus, you have already closed down your options. You are already in a weak position when you turn to the trustees. So it needs to start before that point with a conversation about what level of surplus the fund can make use of.”

Mr Moloney suggested employers and pension fund trustees should have a clear idea of what level of funding was necessary.

He said: “If I do not think a surplus beyond a 120 per cent funding level has any economic benefit to me as an employer, then I should be talking to employees about using option-based strategies to get around that.”

Options would allow funds to sell upside in exchange for protection against downside, removing the need for extravagant funding levels.

Mr Moloney explained: “Take the distribution of outcomes at the end of a period of time. Say the top 5 per cent of outcomes is of no benefit to me, but I, as the employer, will still be picking up the can for the bottom 5 per cent of outcomes. In that case, why not sell the top 5 per cent and buy protection against the bottom 5 per cent. That way, I have done something economically beneficial for me.”

The pan-European team numbers 75 staff, with a further 25 yet to be hired. Mr Moloney said: “We are reasonably certain we will need 100 people in short order.”

TE

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