Intertrust targets profit-share administration market

Financial services administration specialist Intertrust Ireland has entered the share plan administration market in an effort to attract companies not served by the market incumbents.

Share plan administration, or incentive plan administration, is a mechanism whereby employers can deliver tax-efficient financial rewards to employees while also retaining them in the short term.

The schemes can be “approved” by Revenue, which means they’re exempt from income tax or unapproved, in which case income tax is payable.

Existing market players such as Computershare or Mercer target large players including listed entities while Intertrust is understood to be looking both at those large entities as well as medium-sized businesses.

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Through its Jersey office, Amsterdam-headquartered Intertrust already offered this service including to some Irish companies. Those Irish companies serviced out of Jersey will come under control of the Dublin office.

Apart from share plan administration, Intertrust provides a raft of other administration and back-up services for private equity companies, aircraft lessors, asset managers, technology companies, pharmaceutical manufacturers and several other industries.

Expand

The Dublin office last year announced plans to expand to about 150 staff.

Figures from the Irish ProShare Association, a lobby group promoting employee share ownership in the Republic, showed that more than 500 companies have approved profit-sharing schemes. About 6 per cent of Irish employees are shareholders in the companies they work for compared to an EU average of 21.7 per cent.

Intertrust Ireland's managing director, Imelda Shine, said share plans are important for employers "looking for the means to attract and retain the very best talent".

“As such, employee share plans can transform employees into shareholders, aligning employee rewards with corporate performance,” she added.

Share plans, which must be established under a trust, afford employees a tax break although the bonus payment is deferred for a period, meaning employees have to stay with a company to get the benefit.

Schemes approved by Revenue include the “approved profit sharing scheme” and “save as you earn” schemes. Unapproved schemes include discounted, free, restricted or forfeitable shares, convertible securities and employee share purchase plans.

In terms of schemes approved by Revenue, the most common is the approved profit sharing scheme which allows an employee to purchase shares up to a certain limit free of income tax.

Intertrust entered the Irish market in 2009 and has more than 2,500 employees across Europe, the Americas, Asia and the Middle East. Share plan specialist manager Noreen Grogan will oversee the company's new offering in the Republic.