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Survey Report

International Pension Plan Survey Report 2020

Retirement|Pension Board and Trustee Consulting|Pensions Corporate Consulting|Pensions Risk Solutions
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By Michael Brough and Ashika Tailor | February 11, 2021

This year’s survey covers US$17.2 billion in assets under management, a jump from US$15.8 in 2019, and 35 new plans set up in 2020.

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About the survey

International Pension Plan Survey is an annual survey conducted by Willis Towers Watson analysing International Pension Plan (IPP) and International Savings Plan (ISP) specific design elements and membership criteria. The survey this year covers 988 IPPs and ISPs sponsored by 932 companies. Total assets under management for the IPPs and ISPs in this year’s survey are estimated to be around US$17.2 billion.

There’s an increasing prevalence in International Pension Plan (IPPs) and International Savings Plans (ISPs); out of the total number of IPPs and ISPs in our survey, around 19% were set up in the past three years, with 35 plans set up in 2020 alone. They continue to mostly cater to a global workforce, with an increase in the use of IPPs countries that are facing a high risk of government debt defaults.

IPPs/ISPs are being set up for multiple purposes, and we expect this trend to continue, leading to more diverse memberships in the future. We are seeing a marked increase in interest from non-profit organisations (intergovernmental organisations and nongovernmental organisations) looking to set up new IPPs/ISPs.

As in prior years, the overall objective of the majority of plans is to provide retirement benefits or savings (Figure 1).

graphic showing that 70% of objectives are for retirement and 30% for savings 
accessibility requirements.
Figure 1. Plan objectives

Overall results

icone1-industry
Industry sectors

The largest concentration sponsoring IPPs/ISPs continues to be from Banking and Finance, followed by Oil and Gas, and Consumer Goods and Retail.

icone2-Market Size
Market size

The total assets under management for these is estimated to be around US$17.2 billion, compared with US$15.8 billion in last year’s survey. The IPPs/ISPs in this year’s survey have a total membership that ranges from fewer than 10 members up to 18,000 members spread across the globe.

icone3-Vesting Period
Vesting period

Three-quarters of IPPs and ISPs in this year’s survey offer immediate vesting, even though incorporating vesting criteria into the IPP/ISP design can encourage employee retention. Where vesting rules do exist, a phased vesting schedule is slightly more popular than a flat vesting schedule.

icone4-Design Features
Design features

Defined contribution (DC) plans remain the most prevalent design basis, with defined benefit (DB) plans still in operation but typically closed to new members and falling in numbers.

icone5-Fund Managment
Fund management

The number of IPPs and ISPs that offer access to external fund managers (as opposed to internal funds only, which are typically limited to the provider’s proprietary investments) increased from last year’s survey and continues to be the most popular offering.

icone6-Distribution
Distribution options

Lump sum payments (56% of responses) continue to be the most popular form of distribution, though 20% now also offer a drawdown option, which was not really offered 10 years ago.

icone7-Tech-and-AI
Technology and artificial intelligence

Providers continue to invest in artificial intelligence (AI), robotics and other developing technology to improve administration platforms, allowing them to handle more diverse and complex arrangements and offer a superior member experience.

icone8-Plan-Vehicle
Plan vehicle

Trust-based vehicles continue to be the most popular way to segregate and protect member assets. Contract-based plans are also common, which may be due to the historic cost of trust provision as well as a general aversion to trusts in certain regions, such as the Channel Islands. For contract-based arrangements, Luxembourg is the most common domicile.

icone9-Lifestyle
Lifestyle strategies

Lifestyle strategies or funds continue to feature in the investment offering, where 17% of those surveyed offer one Lifestyle option, and 31% of IPPs and ISPs offer more than one Lifestyle option to provide for different membership demographics, risk profiles or currencies.

icone10-Investment
Investment funds

Around half of IPPs and ISPs in our survey offer up to 10 investment funds for members to choose from. The remainder offer in excess of 10 investment options, with a significant number offering over 40 different investment funds.

For more detailed findings, download complete report.

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Title File Type File Size
2020 International Pension Plan Survey Report PDF 2.4 MB
Authors

Senior Director, Global Services Solutions

Associate Director, Global Services Solutions

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