HQ Weighs in On Local Retirement Plan Decisions
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.
Benefits Strategy
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