Retirement, Risk & Finance Perspective - Issue 2, 2009


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Retirement, Risk & Finance Perspective - Issue 2, 2009

Last updated: 14 May 2009

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In this issue:

Reactions to economic crisis from government, employers and employees

In a storm, our ideas of priorities can quickly change from aiming at long-term success to targeting short-term survival. As we batten down the hatches or throw overboard some of our perceived essentials, let’s remember that it is during times of crisis that many of the great success stories are written. Great businesses survive and thrive in harsh times - not by sitting back but by assessing the new environment and making strategic moves that others don’ t.

The world remains competitive, and understanding the environment and what competitors are doing is crucial to success. The good news is that in a storm, it can be easier to make changes because the need for change is more obvious and because employees may anticipate that change. The bad news is that it is very difficult to predict the future and how today’s actions will play out when the environment changes again. In this issue, in three separate articles, we assess the developing picture of how governments, one of the key stakeholders listed below, as well as employees and employers are actually responding to the current crisis:

Governments – in setting the environment within which companies and individuals must operate

Employees – in how they are reacting to financial turmoil, for example, managing their defined contribution balances

Employers - in weighing their options and taking action on benefits as well as on workforce and pay

In this introductory article, we set the scene by looking at how governments have acted in relation to state benefit provision.

Pension crisis: Overview of government reactions

A bleak economy and demographic changes are forcing governments to modify their benefit and pension systems. In this article, we look at some of the trends in different countries, their impact on multinationals’ plans and what companies should consider going forward.

John Betts

Government reactions: Changing the rules

Governments worldwide are amending their pension rules to help relieve the financial pressures, caused by the economic recession, on multinationals sponsoring DB and DC plans. This article looks at the actual changes made or proposed by governments and legislators, and some actions companies might take in response.

Barbara Marder Bas van Boesschoten

Employer reactions: Challenges and opportunities

Severe economic conditions have raised the stakes for multinational sponsors of retirement plans. Here we look at not only the challenges companies face, but also the opportunities available for making strategic changes as they try to shape future retirement plans.

David Newman Owen O'Sullivan

Plan member reactions: They’re concerned

The impact of the economic crisis has had significant effects on both young and older workers, reflecting their concerns about retiring with adequate money. This article addresses the challenges companies face and the urgent need for them to address members’ concerns and offer guidance.

Bill McClain

Upcoming coverage:

In future 2009 issues, we will review how some of the mature government provident funds around the world are performing and how best practice ideas in the defined contribution world are developing. We will also cover insights from the Mercer 2009 Global DC survey. Later in the year, we will include responses to the next phase of the World Economic Forum report on the financing of retirement and health care in a rapidly aging world.

Retirement, Risk & Finance Perspective is intended to stimulate debate around the challenges in designing and developing a global retirement benefits strategy. You are welcome to join the debate; contact us with any comments or questions.