In this paper, we address the impact of the global economic crisis on the pensions of multinational companies and examine practical ways in which companies can improve their international pension provision.
Dealing with DB
In evaluating their pension plans, many multinational companies will have to start by reviewing the design and management of their DB plans, as DB plans provide promises to plan members that have proven to be both costly, and thereforedifficult to keep. These companies need to carefully examine what kind of promises they wish to make and how they will deal with the associated risk. This white paper highlights possible solutions that have been used by both corporate sponsors and trustees.
Creating a sustainable DC pensions system
For many companies, the intrinsic risk of DB plans has led to the adoption of DC-based pension provision. This white paper addresses the growing concerns around the adequacy of DC pensions. These concerns are shared by sponsors and plan members, as, in the future, companies may be faced with employees who simply can not afford to retire. If we wish to create DC plans that will provide adequate retirement income, we will have to change much about the way DC plans are designed and managed. In particular, we will have to find ways to remodel DC plans so that they can benefit from specific characteristics that have typically been considered natural to DB systems, including high levels of participation and contribution, dynamic investment strategies and elements of guarantees.
Focus on Pensions Process Management
Having discussed the design of both DB and DC pensions, we highlight an area that is sometimes overlooked: the day-to-day management of international pensions. As with any other area of business, pensions need to be managed well. And increasingly, multinational companies view pensions as a part of their business, to which regular business principles apply.
In the aftermath of the crisis, we need to address the issues of DB, improve the way that DC systems work, and implement efficient and flexible pension processes.
Download the white paper
Please click here to download the white paper.
High turnout for webinar on 12 January 2010
On 12 January 2010, the author of the white paper, Martijn Tans hosted a one-hour online briefing 'Building pensions for the future'. Around 30 people from across Europe and the United States joined the webinar.
To download his presentation, please click here
