TWO life assurance companies, New Ireland and Friends Provident, have signed an agreement which enables the policyholders of each company to access the other's managed funds.

Following a trend established by banking institutions of allowing policyholders greater flexibility, the new tie up is directed at the corporate policyholder rather than the private policy holder.

A joint statement said the deal would involve an unprecedented level of co operation between two direct competitors in the financial services industry.

New and existing policyholders of either company can split their pension contributions between the two companies' fund management teams and can switch between the managed pension funds of both companies.

Corporate policyholders have been pressing for greater switching rights for some time.

No estimates of the expected new business, under the agreement, have been made by the companies.

However, it could be substantial as New Ireland has £1.7 billion assets under management while Friends Provident manages more than £1 billion.

A major advantage cited by the companies is that policyholders can invest in both companies' managed pension funds and only one set of commission and administration charges will be incurred.

The charges are paid to whichever company the policyholder first establishes their pension with.

There are no limits to the number of times a policyholder may switch funds.

However, there will be what is described as a "nominal administrative charge".