The number of international pension and savings plans set up in 2017 hit a record high, according to a survey by Willis Towers Watson.

The figures reveal 43 international pension plans and international savings plans were established in 2017, compared to 16 in 2016 and 23 in 2015, and a record high for the survey which dates back to 2008.

The plans tend to be used by employers that strive to meet the savings needs of a global workforce, and to help staff in hotspots of economic and political instability. They supplement or complement the usual national systems and typically have a global or regional membership. They were originally aimed at the traditional ‘expat’ - usually a senior executive or specialist - but their usage is expanding as employers offer them to other employee groups.

These include expatriates excluded from, or who will not obtain a benefit from home, or their local system, local workers in the Middle East, executives capped by local plans, and local staff in countries that are economically unstable, or perhaps where no local pension system exists.

In addition, the survey also revealed the plans are offered by companies in over 20 business sectors, but particularly in banking and finance, oil and gas, and industrials. Assets under management for the funded plans covered in our survey are estimated to be up to US$13bn.

Commenting, Willis Towers Watson senior director of global services and solutions group Michael Brough said: “Interest in these longer term pension and savings plans is very strong, and I expect it to remain high as employers try to attract and retain skilled workers and global nomads. Multinationals are also exploring these plans to support different groups of their international workforce.

“While they are still popular for senior expats, these plans are increasingly being used to support foreign workers in countries where the host system is off limits. Many find themselves locked out of the local pension systems, such as in nomad hubs like Singapore, or where they have to contribute but cannot get the local benefits, like in China.

“In some countries, local employees may find that the pension infrastructure is unreliable or simply doesn’t exist, and international plans can be a very effective option. They can safeguard employee assets and offer some protection from sharp currency falls or local corporate and government bond defaults. Many plans have been established to cover countries where there has been a high degree of economic instability in recent years, including Argentina, Egypt, Turkey, Venezuela and Ukraine.

“In the Middle East international plans have been popular because employees place a strong emphasis on retirement benefits. In many cases, the international plans are far superior to what is on offer locally.”

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