ARLINGTON, VA, March 6, 2023 — Demand for international pensions and savings vehicles is continuing to grow as employers try to optimize their benefits packages for different groups within their global workforce, research by WTW showed today.
WTW (NASDAQ:WTW), a leading global advisory, broking, and solutions company, launched its latest International Pension Plan Survey, which covered 1023 International Pension and Savings Plans (IPPs and ISPs). A quarter (23%) of these were set up in the last five years, reflecting the growth in demand. Assets under management of the surveyed IPPs and ISPs reached US$19.3bn, up 5% from the previous year.
Around half (51%) of the IPPs and ISPs were set up for expatriate workers unable to stay in their ‘home’ country plans, while at the same time either locked out of their ‘host’ country arrangements or likely not entitled to a benefit from any potential ‘host’ plan.
But IPPs and ISPs can also solve savings problems for various other employee groups. One in eight (13%) plans were established to include and serve local employees, often in countries at risk of economic or political instability.
“Companies are facing skills shortages in many hotspots across the world and are redefining their employee experience and total benefits offer to stay competitive.”
Tony Broomhead | managing director, Integrated and Global Solutions, WTW
Tony Broomhead, managing director, Integrated and Global Solutions, WTW, said: “Companies are facing skills shortages in many hotspots across the world and are redefining their employee experience and total benefits offer to stay competitive. Many multinationals, charities, and international governmental organisations are looking for ways to offer minimum yet sufficient levels of pensions and savings to their global staff.
“Expats are often excluded from joining local ‘host’ pension schemes, or it may be inadvisable for them to do so. And local staff in many countries may also have limited options, or any savings may face the risk of economic instability or local sovereign debt default. International plans are a flexible way for employers to offer these vital benefits in a secure and efficient way.
“Companies are looking at setting up IPP or ISP solutions that can meet and fix multiple pensions challenges within the business. These plans can serve various expat groups, such as foreign staff excluded from local plans like the Central Provident Fund in Singapore, or to reward executives subject to capped ‘home’ country benefits. In the Middle East and GCC these international plans can be used to fund mandatory gratuities.
“More recently these plans can help meet DEI objectives whereby plan sponsors are keen to be able to report that by including an IPP they are now able to offer access to a pension plan to all their global staff.”
The WTW IPP Survey 2023 also found that:
The WTW International Pension Plan Survey 2023 was conducted in Q4 2022 and covers 1023 IPPs and ISPs sponsored by 955 companies. It is the 15th edition of the survey. Download a free copy here.
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