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One solution is to establish an international retirement plan, providing a single solution across assignments and the potential for a common scheme design. The survey results show that only 12% of companies have established international retirement plans to ensure continuity of benefits. Such plans, often offshore, are used across a variety of expatriate types. They are most common where there is no pension plan in a particular country or membership in a host country pension plan would adversely impact the employee. Offshore plans may not address all concerns, such as taxation or facilitating exclusion from host country pension arrangements, depending on the jurisdictions concerned, but do go some way to allowing for continued pension plan membership under a single arrangement whilst employees are on various assignments. “While 12% appears low,” said Price, “it is indicative of the market and we’re actually seeing an increase in the use of such vehicles outside Asia Pacific. They are very effective in providing consistent cover for mobile populations and in jurisdictions where no appropriate plans exist.” The most common reasons respondents gave for choosing not to implement an international retirement plan were insufficient numbers of employees to justify the costs (38% of respondents) and a combination of home/host-country plan meets needs (30%). But a significant number of respondents (17%) are unaware of the potential benefits of establishing an international retirement plan or have never considered this as an option.
One solution is to establish an international retirement plan, providing a single solution across assignments and the potential for a common scheme design. The survey results show that only 12% of companies have established international retirement plans to ensure continuity of benefits. Such plans, often offshore, are used across a variety of expatriate types. They are most common where there is no pension plan in a particular country or membership in a host country pension plan would adversely impact the employee.
Offshore plans may not address all concerns, such as taxation or facilitating exclusion from host country pension arrangements, depending on the jurisdictions concerned, but do go some way to allowing for continued pension plan membership under a single arrangement whilst employees are on various assignments.
“While 12% appears low,” said Price, “it is indicative of the market and we’re actually seeing an increase in the use of such vehicles outside Asia Pacific. They are very effective in providing consistent cover for mobile populations and in jurisdictions where no appropriate plans exist.”