What a plan wants, what a plan needs …one of the top priorities for large plan sponsors in 2016 include investment products that can be used globally, according to fixed-income powerhouse PIMCO.
The Newport Beach, California-based investment manager released its Global Defined Contribution Survey for Multinational Corporations in late December. Its goal is to help “identify the priorities and challenges associated with managing employee pension obligations in multiple countries.”
PIMCO notes that 401(k)s and similar defined contribution offering now represent nearly half of the world’s $36 trillion in total pension assets.
The firm found the following top priorities among large plan sponsors:
- Attracting and retaining talented employees with plans that help them retire at a desired age with sufficient income
- Reviewing global plan governance, including creation of a global retirement plan philosophy and evaluating and possibly streamlining providers
- Simplifying investment lineups and encouraging investment managers to offer investment products that can be used globally
- Expanding access to international DC plans: Nearly a third offer an international DC plan already and nearly half said they may consider adding one in the future.
Still, for multinational corporations there can be significant obstacles to overcome when attempting to design a global defined contribution plan. They include dealing with distinct local regulations and providing broadly consistent benefits to employees who relocate.
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With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of 401(k) Specialist and Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots. Experienced financial services content executive specializing in creative new media delivery. He joined the American Retirement Association in 2023 as Chief Content Officer, overseeing communications for the organization, as well as its sister organizations.