Smooth Moves for Argus

Although Gibraltar's civil servants and the employees of some of the Rock's bigger businesses and profes sional firms should enjoy a relatively comfortable retirement, a substantial number of today's work force have no form of pension arrangements and face hardship when they can no longer work. Several times in recent years, Chief Minister Peter Caruana has rung alarm bells to this effect — but the response from much of the business sector has been, at best, luke warm, and suggestions that individuals should take responsibility for their own needs appear to have fallen on even deafer ears.

Part of the problem — which is not unique to the Rock but affects much of the developed world —stems from an increasing lon gevity brought about by medical advances and improved social con ditions in the decades since World War II. It already puts heavy burdens on the health and social welfare provisions of western gov ernments, and Gibraltar — where our population has the second highest life expectation of any EU country — is no exception.

Simply stated this meansthat fu ture old age pensions provided by Government will not be enough to allow many of the elderly to enjoy the same standards of living and quality of life to which they have become accustomed during their working years.

handbook chartered financial planner from the UK,alluding to the fact that tra ditionally ultra-safe investments give poorer returns than those with greater risk.

"Most of us are not saving enough for the future; but even more alarming is the fact that a surprising number of Gibraltar's bigger companies make no provi sion for pensions for their staff — they simply have no pension funds," says Tom Eraser, manag ing director and CEO of European Financial Planning Group(EFPG) told me recently.

In a step towards addressing these concerns, the Government has introduced Provident Fund 3 — some aspects of which remain ill-defined, and which has been met with a mixed response from insurers on the Rock.

However, the situation could change for the better as Argus/ Norwich Union continues to ex pand its local business.The Bermu da-based insurer Argus —which acquired Norwich Union's Gi braltar operations two years ago — has extensive experience of and expertise in the pensions market and is looking at the possibility of applying these on the Rock, ac cording to the company's chairman and CEO Gerald Simons.

Since it was established in 1950, Argus has grown into the Carib bean's largest provider of health insurance as well as of property cover... and pension planning.

"On our side of the Atlantic, Argus group is one of the largest providers of pensions and we ad minister pension plans for many of the major companies in the Fortune 100 and Fortune 500 lists," he told me.(Each year the US international finance magazine "Fortune" lists the top 100 and top 500 American corporate businesses.)

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"We actually welcome PF3. It is good and safe — though perhaps too safe," says Anthony Drew, a

"These demand the highest standards of administration and pension planning is one of the ar eas in which we are most at home, So, while we have no immediate plans to enter the pensions market in Gibraltar, it is an area where we would be happy to provide insight and it is something we are certainly looking at."

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In fact, since the Argus Group takeover — and in the face of growing competition in the local insurance industry — Argus/ Nor wich Union has introduced several innovative products. Earlier this year its motoring customers were offered a string of attractive new options including a protected no claims bonus — which the then local chief executive Sandy Guthrie claimed as a "market first" for Gibraltar.

The firm's Protected No Claims Bonus has proved "highly suc cessful" a company spokesperson claims, A novel additional feature of this is the company's guarantee to maintain the premium without any increase for two vears if no material changes are made to the policy in that period.

Though Guthrie retired sooner than the board in Bermuda expect ed,"there is no immediate rush to replace him,"Simons says."Sandy had developed a strong triumvi rate of managers who have taken over seamlessly and are operating well as a team.

"The reality is that we have three first class guys and our Gibraltar operations are running every bit as well as when Sandv was there — probably thanks to the strong skills he passed on. But, clearly this triumvirate cannot continue in the long term and we are looking at several options... We have made a few inquiries in Gibraltar, but are also looking elsewhere.

"Any one of the present three managers are good candidates to take over the Gibraltar operations in the future and ideally it would be useful to find an older person to fill Sandy's shoes as a mentor for a few years to encourage each of the three to come through."