Mercer Insights


The Integrated Pension Governance and Risk Management Framework


Management of defined benefit (DB) pensions is a complicated challenge for multinationals today, given that pension funds are usually located in countries outside the sponsor’s headquarters. It is essential to proactively tackle this problem and the impact it has on the multinational’s financial standing.

A weak governance framework will affect a multinational’s capacity to deliver pension promises to its members. It could result in loss of control over pensions by central management and a lack of efficient and effective global pension management. Corporate governance and asset-liability risk management must be considered simultaneously – unmanaged pension risk exacerbates governance issues and weak governance leaves financial risks unchecked.

BUILDING AN INTEGRATED FRAMEWORK

An integrated framework is based on five key pillars that address most (if not all) of the internal and external pension issues relevant to multinational companies:

Investment in a quality framework will provide the most benefit during times of stress, when decisions have to be made quickly and under pressure, as it will supply vital information on pensions risk and exposure.

The integrated framework:

  • Facilitates standardisation and allows stakeholders to communicate using a common pension language
  • Raises the level of communication and dialogue between stakeholders
  • Enables corporate management to understand local risk management and governance issues and how they interact with global issues in the face of differing local regulations and environments
  • Allows for the integration of local investment and financial risk management strategies into the corresponding global processes

 

 

WHY MERCER

Mercer has considerable experience in defining, establishing and implementing these global, integrated frameworks. With this experience, we are in a position to help multinationals tackle both corporate governance and asset-liability risk management within the same integrated framework.

  • Vast experience in defining, establishing and implementing global integrated frameworks for multinationals from all sectors
  • Unparalleled understanding of the specificities of local pension regulations
  • Advisory services including strategic tools, best-in-class ideas and strategies and investment and risk management training
  • Extensive expertise in working with trustee clients in cases where the sponsor is affected by changing regulations and standards
  • More than 40 years experience working with pension funds, foundations, endowments, wealth managers and other investors in more than 46 countries

 

READ MERCER’S WHITE PAPER

Mercer’s new white paper, The Integrated Governance and Risk Management Framework, is a comprehensive, in-depth publication that provides tips and tools that will help you regain control and achieve satisfactory levels of governance and risk management.

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LEARN MORE

Let Mercer work with you to implement an integrated framework and benefit from reduced risk exposure and global pension management costs as well as an improved governance structure!

For more information, download our informational flyer about this important topic and/or contact one of the following individuals:

CONTACTS

  Julien Halfon 

+44 (0) 20 7178 3596

 Owen O'Sullivan 

+44 (0) 20 7178 3251