EY Human Capital Conference 2012: International social security - the essential guide
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Interactive discussion in relation to some of the practical current social security-related issues facing employers with an internationally mobile workforce.

Interactive discussion in relation to some of the practical current social security-related issues facing employers with an internationally mobile workforce.

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EY Human Capital Conference 2012: International social security - the essential guide Presentation Transcript

  • 1. 2012 Human Capital Conference23–26 October International social security: th essential guide the ti l id
  • 2. Disclaimer► Ernst & Young refers to the global organization of member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young LLP is a client-serving member firm of Ernst & Young Global Limited located in the US.► This presentation is ©2012 Ernst & Young LLP. All rights reserved. No part of this document may be reproduced, transmitted or otherwise distributed in any form or by any means, electronic or mechanical, including by photocopying, facsimile transmission, recording, rekeying, or using any information storage and retrieval system, without written permission from Ernst & Young LLP. Any reproduction, transmission or LLP reproduction distribution of this form or any of the material herein is prohibited and is in violation of US and international law. Ernst & Young LLP expressly disclaims any liability in connection with use of this presentation or its contents by any third party.► The views expressed by panelists in this session are not necessarily those of Ernst & Young LLP LLP.Page 2 International social security: the essential guide
  • 3. Panelists► Mike Kenyon y ► Koyla Hache y ► Ernst & Young LLP (UK) ► General Electric► Gary Chandler ► Ernst & Young LLP (UK)Page 3 International social security: the essential guide
  • 4. Agenda► Interactive discussion in relation to some of the practical current social security-related issues facing employers with an internationally mobile workforcePage 4 International social security: the essential guide
  • 5. Areas for discussion► Recent country changes and areas of focus from an employer perspective: l ti ► India ► China ► European Union► Long term Long-term expats — the options from a social security perspective► Optimization p p planning — reducing ongoing social security g g g g y costs within a global mobility programPage 5 International social security: the essential guide
  • 6. India
  • 7. IndiaTotalization network Signed gIn force (effective date): (date signed):► Belgium ( September 2009) g (1 p ) ► Hungary ( February 2010) g y (3 y )► Germany (1 October 2009) ► Czech Republic (8 June 2010)► Switzerland (29 January 2011) ► Norway (29 October 2010)► Denmark (1 May 2011) ► Finland (12 June 2012)► Luxembourg (1 June 2011)► France (1 July 2011)► South Korea (1 November 2011)► Netherlands (1 December 2011) Further totalizations being negotiated: Austria, Australia Bulgaria Canada Cyprus, Greece, Italy, Austria Australia, Bulgaria, Canada, Cyprus Greece Italy Sweden and USPage 7 International social security: the essential guide
  • 8. India► International worker status: ► Updated FAQs on 25 May 2012 ► Further clarifications required Discussion points: ► What are companies doing with regard to certificate of coverage applications for Indian outbound employees post this change? ► What is the recommended current position/action?Page 8 International social security: the essential guide
  • 9. India► Indian totalizations highlight another common compliance g g p “challenge” for employers in that the exemption in the host location under an Indian certificate of coverage is only a “partial” exemption. Discussion point: ► What are companies doing with regard to these partial exemptions?Page 9 International social security: the essential guide
  • 10. China
  • 11. China► New social security law y► Foreign nationals working in China subject to People’s Republic of China ( p (PRC) social security system ) y y► Interim measures effective from 15 October 2011► Issues to consider: ► Retroactive contributions ► Late payment surcharge after 1 January 2012 (0.05% per day) ► Different interpretation between local governments ► Partial refund of payments upon departure (process optimization)Page 11 International social security: the essential guide
  • 12. China Location Date Title Effective date Xiamen 5 March 2012 Notice on the imposition of social security on foreign p y g 6 October 2011 nationals working in China issued by Xiamen Qingdao 4 November 2011 Notice on the imposition of social security on foreign 15 October 2011 nationals working in China issued by Qingdao Chengdu 19 October 2011 Notice on the imposition of social security on foreign 15 October 2011 nationals (including individuals from Hong Kong, Macau and Taiwan) working in China issued by Chengdu Beijing 11 October 2011 Guidance on the imposition of social security on 15 October 2011 foreign nationals working in China issued by Beijing Suzhou 18 January 2012 Notice on the imposition of social security on foreign October 2011 nationals working in China issued by Suzhou Zhuhai 11 October 2011 Notice on the imposition of social security on foreign 1 November 2011 nationals working in China issued by Zhuhai Shanghai – No local variation from rules – Shenzhen – No local variation from rules – Guangzhou – No local variation from rules – Tianjin – No local variation from rules – Fuzhou F h – No local variation f N l l i ti from rules l –Page 12 International social security: the essential guide
  • 13. China Discussion point: ► What are companies currently doing in China in relation p y g to social security liabilities?Page 13 International social security: the essential guide
  • 14. European Union (EU)
  • 15. EU: revised territorial coverage of the newregulationAustria Hungary Norway*Belgium Iceland* Poland gBulgaria Ireland Portugal gCzech Republic Italy Slovak RepublicCyprus Latvia RomaniaDenmark Liechtenstein* SloveniaEstonia Lithuania SpainFinland Luxembourg SwedenFrance Malta Switzerland*Germany Netherlands UKGreeceGPage 15 International social security: the essential guide
  • 16. EU: revised territorial coverage of the newregulation► Switzerland adoption of the new rules ( g p (Regulation ( ) (EC) No. 883/2004): with effect from 1 April 2012► Norway, Liechtenstein and Iceland adoption of new y p legislation: from 1 June 2012► Issues to consider: ► Transitional provisions — E101 or A1? ► Challenges in relation to treatment of cross-border third-country nationals ► Increased focus on employer obligations in relation to multistate workersPage 16 International social security: the essential guide
  • 17. EU Discussion point: ► What practical steps are companies taking in relation to the increased focus on multistate workers?Page 17 International social security: the essential guide
  • 18. Long-term expats
  • 19. Long-term expats► Most totalization agreements will have a maximum p g period for which exemption can be obtained in the host location.► If the individual stays beyond that p y y period, he or she will typically fall out of the home social scheme into the host scheme.Page 19 International social security: the essential guide
  • 20. Long-term expats Discussion points: ► What does company policy say about “switching” social tax schemes? ► Do companies notify the employee about possible impact o benefits? on be e s ► What are company policies in relation to social security equalization and/or p y q payment of voluntary contributions? y ► What challenges do companies face with regard to ensuring correct withholding?Page 20 International social security: the essential guide
  • 21. Social security optimization
  • 22. Optimization planning► Process optimization: p ► Policy optimization: y p ► Ensuring fully efficient end- ► Flexing the traditional home- to-end processes/platforms country policy for certain two- are in place so that domestic country corridors where exemptions and/or refunds significant cost savings can are effectively identified and be realized without significant implemented impact on the employee or his or her dependantsPage 22 International social security: the essential guide
  • 23. Optimization planningProcess optimization examples:► Exemptions: ► UK ► France ► Belgium ► Argentina► Refunds: ► Brazil ► China ► Germany G ► Switzerland► Outbound population: p p ► France ► UKPage 23 International social security: the essential guide
  • 24. Optimization planning Discussion point: ► What are companies’ current thoughts on such opportunities, opportunities and have these changed in light of the current global economic downturn?Page 24 International social security: the essential guide
  • 25. Conclusion► Increasing speed of change in social security legislation will continue t provide challenges i relation t mobility ill ti to id h ll in l ti to bilit programs — from risk and cost perspectives.► Various strategies exist to minimize ongoing social security costs — from process and policy perspectives.► Ability to provide substantial program savings while protecting against any individual employee loss.Page 25 International social security: the essential guide
  • 26. QuestionsPage 26 International social security: the essential guide