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Willis Towers Watson reports AUM in cross-border pension plans increased by €1bn from 2018 to 2019

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Willis Towers Watson’s International Pension Plan Survey Report 2019 was released at the end of January, 2020. The annual report summarises the results of their survey, which includes 932 international pension and savings plans (IPPs and ISPs) sponsored by 877 companies.

In particular, the survey revealed that Assets Under Management (AUM) rose to €14.6bn (USD 15.8bn) from €13.6bn (USD 14.7bn), with the largest concentration sponsoring IPPs/ISPs from the banking and finance sectors, followed by oil and gas, consumer goods, and retail. Other industries participating in the survey were food and drink, transport and travel, engineering and power, technology, non-profit organisations, and pharmaceuticals among others.

Originally aimed at expatriates, IPPs and ISPs that were established in the 20th century were more specifically created for expat senior executives who may have had careers in many different countries and were unable to make arrangements within their home countries or to join host country plans.

The popularity of IPPs and ISPs has been more recently driven by the needs of foreigners employed under a local contract, gig workers, and other employee groups. The majority of IPPs and ISPs in this year’s survey were set up for a ‘global’ workforce.

Half of the IPPs/ISPs in the survey offer up to 10 investment funds for members to choose from, while the rest offer as many as 40 different investment funds, while three-quarters of IPPs and ISPs offer immediate vesting, and flat (or cliff) and phased vesting schedules  are popular wherever vesting rules already exist.

WTW believes demand in 2020 will be further driven by companies’ desire to attract or retain local staff in countries that are economically unstable, or where no local pension system exists. A spokesperson said that there is “likely” growth in IPPs and ISPs ahead for more than just expatriates, and that demand from both non-governmental and inter-governmental organisations (NGOs and IGOs).

A PDF of the survey report is available for download here.

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