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Pensions: Global Accounting Consolidation and Risk Management

Is your multinational company interested in a more effective way to consolidate and monitor the financials of your pension debt? As your global actuary, we can draw from our experience with over 300 multinational companies to help you streamline information required for your annual report filings and enhance your risk management and controls.

Defined benefit (DB) pension plans represent a complex reporting challenge and can create competitive headwinds. We can help you understand and manage your exposure to DB pension plans around the world.

Our services include:

  • Supporting a public company’s preparation of its consolidated financial accounting figures and disclosure information for pension plans for your annual report and/or Form 10k, while also
  • Facilitating oversight of your company’s pension plans from a financial risk and cash management perspective

Willis Towers Watson can support your accounting and risk management process through a range of services.

  • Current state assessment: We can help you assess:
    • Your global pension accounting process and monitoring approach to establish or improve procedures and guidelines, and clarify technical issues including changes to accounting standards
    • Your pension exposures around the world – and opportunities to improve your risk position
  • Foundational support: Your annual financial reporting cycle is a key underpin to effective management of your pension risk around the world. On an ongoing basis, we can provide the following services for your DB pension plans:
    • Coordinate/review setting of local actuarial assumptions for financial reporting
    • Prepare consolidated pension reporting that presents key results for your material pension plans under the appropriate accounting standards
    • Manage and automate the complex annual cycle of collecting required financial reporting information - using Willis Towers Watson’s global accounting consolidation software, FAStrack - to allow a more accurate, efficient and streamlined approach
    • Review reporting results prepared by local actuaries, e.g., for global consistency
    • Support special accounting calculations and the like due to extraordinary activities such as acquisitions, divestitures, restructuring, changes to pension plans, de-risking, plan termination/windups
    • Estimate/project future pension costs, e.g., for budgeting, forecasting or planning - using Willis Towers Watson’s global software, Cost & Risk Channel
    • Support for external auditor review process

Our services are supported by world-leading technology, research, market intelligence and intellectual capital.

Managing risks

Compliant, consistent and accurate financial reporting of pension obligations around the world helps you better understand the costs and risks associated with pension plans.

Increasingly, multinational companies look to have a well-defined vision and strategy to manage pension risk around the world by applying best practice governance principles to optimize use of resources and financial capital. This requires

  • A global governance framework and operating model to realize opportunities for financing pensions by navigating multiple considerations – including effective integration of people, processes and technology
  • A roadmap covering multiple years to achieve the organization’s risk goals around the world
  • Strategic and operational collaboration between group and local stakeholders and partners

We support:

  • Managing and optimizing pension costs and risks around the world through changes to plan portfolio design, financing, administration/operation, employee experience, analytics, insights and reporting
  • Articulating your desired state including guiding principles, governance framework, operating model and roadmap and priorities
  • Ongoing oversight through regular monitoring of pension plans and risk metrics globally, including forward-looking management information and anticipating key decision points

Creating value

We work with you to create value by:

  • Providing assurance of the accuracy of your local actuaries’ accounting information under relevant standards
  • Supporting consistency in the implementation of your global accounting policies and actuarial assumptions for financial reporting, as well as calculations and accounting methods
  • Providing deep expertise and experience to help you handle emerging developments for changes, e.g., corporate changes, legislation developments, changes to accounting requirements
  • Reducing internal staff time spent, e.g., on coordination/review and on auditor questions
  • Identifying opportunities to reduce costs
  • Strengthening risk management, debt management and other controls
  • Providing access to timely and tailored information about pension trends and developments in local markets

The Willis Towers Watson difference

We have been providing services in this area for many decades. Over 300 multinational companies use our global actuarial and accounting consolidation services every year.

So, we are able to draw from experiences working with a wide variety of companies using a range of different approaches to handle their different contexts and circumstances.

The benefits of our services go beyond combining figures from local actuaries. Serving as your global actuary, we can:

  • Streamline the development of the information required for your annual report filings, increase the accuracy of the information being reported, reduce internal staff time and help ensure best practices are followed
  • At the same time, we can enhance your risk management and controls related to your company’s pension debt.
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