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.
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 email@example.com