Administration October 1, 2002

HQ Weighs in On Local Retirement Plan Decisions

January 22, 2001 (PLANSPONSOR.com) - More than half of multinational companies are weighing in on local retirement plan investment decisions - and nearly three-quarters of those not doing so are making plans to, according to a new survey.
Reported by

The survey by William M. Mercer Co. LLC, found that 51% of US multinationals and 56% of non-US companies already exercise some form of corporate involvement or oversight of local plan investment decisions, according to the Wall Street Journal.

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The study identified several benefits of the strategy, including:

  • lower costs resulting from greater economies of efficiency and scale
  • reduced risk by balancing co-related market risks
  • higher returns due to the application of best practices and asset management expertise

The most common areas of retirement plan involvement include:

  • 63% – Benefit funding policy, due to rise to 91% involvement over next two years
  • 60% – Investment objectives and strategy, due to increase to 87% over next two years
  • 51% – Investment manager selection, expected to rise to 75% in two years.

Mercer received responses from 83 multinational companies with total global pension assets of $400 billion. Of those, 48% are headquartered in the US, 19% are in the continental Europe, 19% in the UK, 7% in Canada, and 7% elsewhere.

– Nevin Adams      editors@plansponsor.com

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