Steven Kerstein, the new managing director of Towers Perrin's worldwide retirement consulting practice, plans to keep targeting the large corporate market for clients even as those companies shift from traditional pension plans.
"We are seeing a rebalancing of the benefits pie," said Mr. Kerstein, who works in the Stamford, Conn., office.
"We don't see companies getting rid of" defined benefit plans, he said. "They don't terminate them; they move to cash balance plans."
"Cash balance plans aren't as generous as (traditional) defined benefit plans. But money saved from defined benefit plans is being spent elsewhere on stock options, or defined contribution plans."
In rearranging the benefits, he said, executives ask, "`Who are we trying to hire? Who are we trying to retain?' It differs from company to company on what business objective they have driving employment."
Not all companies want longtime commitments from employees. An executive at one client said, "We want the best 10 years of an employee's life." So the question becomes what benefit package would be most attractive to that recruiting strategy.
Mr. Kerstein replaces Robert G. Hogan, who was named managing director-worldwide benefits practice, the No. 2 executive at the firm. Mr. Kerstein will report to Mr. Hogan. Mr. Kerstein had been East Coast regional leader for the retirement consulting practice. The changes are part of reorganization of senior management after the retirement of several top executives.
"The large corporation is Towers Perrin's target market," Mr. Kerstein said. "We prefer to consult to large clients, which can benefit from our array of services."