Towers Watson: International pension plan use growing

Multinational employers in a Towers Watson survey established 33 international pension plans in 2012, bringing the total number to 403 among respondents.

An international pension plan is typically a retirement plan established for mobile expatriate employees.

“The growth of the IPP market is mainly driven by more companies offering IPPs for international or expatriate employees to either 'top up' or replace home-country retirement plans,” said Michael Brough, senior consultant at Towers Watson, in a news release.

All but one of the plans formed last year is a defined contribution plan. Overall, only 10.5% of the IPPs sponsored by survey respondents are defined benefit plans compared with 87% DC plans. The remaining IPPs are hybrid plans.

Multinational employers also have been getting increasingly more creative with plan design and offerings, including placing multiple employee groups into a single pension structure and investment platform. About 40% of IPPs offer up to 10 investment options while the remaining offer more. About 40% also offer lifecycle options.

The plans are for a wide spectrum of participants, ranging from a single participant to more than 4,000.

The 2012 survey covers 403 IPPs and 391 companies, compared with 337 IPPs sponsored by 300 companies in the 2011 survey.

— Contact Kevin Olsen at kolsen@pionline.com | @Olsen_PI