Many multinational companies are beginning to move towards a more integrated, international pensions strategy. These companies need a coordinated and efficient approach to pensions, both locally and globally.
Multinational companies are increasingly looking to adopt a global approach to managing their pension plans. International legislation requires companies to have a complete view of their international risks and liabilities – and the financial crisis only added to the pressure for transparency, good governance and control. As a result, many companies are looking both to improve their pension management and to cut their costs.
By taking a global overview, companies can gain a better idea of where they can control or reduce their costs; they can increase their efficiency and, at the same time, reduce the complexity of their pension plans. However, creating a more integrated and international pension strategy is not easy, as no two national pension systems are the same. For multinational companies, navigating through different tax regulations, even different social and economic cultures, can be a challenge.
Although implementing one cross-border pension plan is not easy, companies are beginning to consider that they could already benefit from pooling assets in some countries. Buyouts of outstanding defined benefit (DB) liabilities and retirement packages for mobile employees are other approaches towards a more integrated, international pensions strategy.
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