How do you design and oversee your retirement plans globally to ensure they effectively meet your goals and the needs of your employees?
Optimizing your global retirement portfolio
JOHN CARTER: Retirement plans around the world have very different features due to local legislation and market practice. Even within a country, there can be several different options for plan designs, as well as different funding vehicles available.
For example, in some countries multi-employer arrangements such as master trusts are becoming more prevalent as governance burdens increase and companies look to outsource specialist activities. Our own LifeSight master trusts, which operate in several countries, are seeing increased demand from clients looking to manage their governance requirements in this way.
In addition, multi-country plans, such as international pension plans, should be considered, as they can be optimal for some employee groups in certain locations, like in countries with unstable economies or no established local pension provision. So how do you go about designing and overseeing your retirement plans globally to ensure they effectively meet your goals and the needs of your employees?
Increasingly, we see multinational companies putting a global retirement strategy in place to provide a clear framework for making decisions about plan designs at the local level. Such a strategy gives consistent guidance to local businesses on the types of plan features of the preferred, and which delivery approach to use. Once the plans are in place, it's also important to recognize that different plan types require different governance models, which vary due to the risks involved.
To help our clients identify the best governance model in each case, we consider four broad categories of plans-- single employer or multi employer, trust or foundations, insurance contracts, and unfunded plans. Our clients find this framework helps them to recognize the commonalities and the differences across their global retirement landscape, and helps to put in place appropriate governance practices in a consistent way.
Such a global structure provides an effective approach to help you design your retirement plans and manage their risks and costs, while providing the best experience for your employees.