Multinational Companies Re-examine Retirement Plan Investment Policies

June 26, 2007 ( - A new survey from Watson Wyatt Worldwide has found that many multinational companies are reexamining global investment policies and risk management strategies related to their retirement plans.

A press release from Watson Wyatt said its survey of 101 large multinational companies based in 20 countries found that 31% are considering moving toward a more consistent global investment policy for retirement plans. Another 9% plan to implement such a policy in the next three years.

About 21% of survey respondents are implementing a consistent global risk management policy over the next three years, and another 20% are considering such a policy, the release said.

Global governance issues related to pensions and defined contribution (DC) plans are also of great concern to multinational firms, the survey found. The vast majority (78%) of companies reported that the efficient governance of worldwide pension plans is a major issue for them, and about half (53%) have reviewed their global governance procedures in the last three years.

Eighty-three percent of those organizations have made changes to their global governance procedures. Concern over regulatory risk was the reason for the change 69% of the time. The majority of companies (72%) said legal and regulatory issues hinder implementation of policies worldwide.

Most companies said they do not have a governance system in place to review DC plans – 60% of companies said DC investment options are never reviewed by corporate headquarters or are reviewed only on an ad hoc basis.

“Successful multinational organizations often have a huge range of retirement plans for their employees worldwide which, together with variations in local laws and regulations, makes oversight of these plans a challenge,” said Simon Gilliat, global head of Watson Wyatt’s international practice, in the release. “Companies can make progress by gaining a better understanding of their retirement liabilities around the world and then constructing an approach that is suitable for their particular needs and circumstances.”

The Multinational Pension Governance 2007 Survey Report can be purchased here .