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Welcome to Issue 2, 2009 of
Retirement, Risk & Finance Perspective, Mercer's home for thought-
provoking insights on retirement and pension issues facing multinational companies.
In this issue:
Reactions to economic crisis from government, employers and employees
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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
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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.
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