Research

International Pension Plan Survey Report 2018

February 13, 2019

By Michael Brough and Ashika Shepperson

Our annual survey of international pension plans (IPPs) and international savings plans (ISPs), examines specific plan design features and membership or eligibility criteria. This year's International Pension Plan survey covers 999 plans sponsored by 939 companies.

The IPP/ISP market continues to grow and develop, with 76 plans set up in 2018 alone.

This demonstrates the continuing trend for IPPs/ISPs to be set up by global companies with internationally mobile employees and local employees that require pension provision where local arrangements are inadequate or absent.

Key findings from the survey are:

  • IPPs/ISPs are offered by companies in over 20 business sectors, with high prevalence in Banking and Finance, Oil and Gas and Food and Drink.
  • Assets under Management for the funded plans that responded in our survey are estimated to be up to US$14.7 billion.
  • Sixty-four percent have been established with a 'retirement objective' (IPPs), with 36% having more a shorter-term 'savings objective' (ISPs).
  • Fourteen percent of the IPPs or ISPs in our survey reported to an Investment Governance Committee; this low prevalence may be related to the small membership size of many plans.This will be assessed in more detail in future surveys.
  • The majority (55%) of plans have a global coverage, with the rest restricted to different regions.
  • A growing number of IPPs/ISPs are being used for populations in Singapore as these can provide tax relief to the sponsoring employer. One hundred and ten plans were set up in the last three years covering this region and we expect demand to develop further in 2019.
  • IPPs/ISPs provide a valuable vehicle that can protect savings for local employees in countries suffering from economic or political turbulence. The number of such plans has doubled compared with last year. 
  • Trusts continue to be the most popular arrangement used to hold the contributions and assets of IPPs/ISPS.
  • Pensionable salary is most commonly defined as ‘base salary only’ (66% of plans) followed by ‘base plus bonus’ at 21%.
  • Providers are expanding their technology capabilities and investing in the use of AI and robotics to enhance members’ experience through use of online chat functionality.

Click on the image to read the full report.