Mercer APAC Expatriate Benefits Webcast

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Benefits challenges and trends for expatriates and internationally mobile employees.

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Mercer APAC Expatriate Benefits Webcast

  1. 1. BENEFITS CHALLENGES AND TRENDS FOR EXPATRIATESAND INTERNATIONALLY MOBILE EMPLOYEESAPRIL 2012Mark Pricemark.a.price@mercer.comTom Farmertom.farmer@mercer.com
  2. 2. CHALLENGES IN EXPATRIATE BENEFIT PROVISIONS 36% 2008 2012 27% 24% 22% 20% 18% 15% 15% 14% 5% 2% 2% Developing Ensuring Expats Cost containment Ensuring smooth Developing Other globally consistent are not transition at end of policies & plans for approach disadvantaged assignment new countriesMERCER 1
  3. 3. KEY SURVEY HIGHLIGHTS• 63% of traditional expatriates are maintained in home country retirement plans• 12% of companies have established International Pension Plans to ensure continuity of benefits for global nomads and long-term expatriates• 60% of International Pension Plans are now DC plans vs. only about 20% in 1991• 53% of companies experienced premium increases of 6% or more in their international medical plan premiums at their last renewalMERCER 2
  4. 4. KEY RETIREMENT BENEFITS CHALLENGES NATURE OF LONG-TERM NATURE ASSIGNMENTS OF PENSIONS EMPLOYEE BENEFITS EXPECTATIONS FRAGMENTATION COST TAXATION ALLOCATIONMERCER 3
  5. 5. RETIREMENT BENEFITS FOR TRADITIONAL EXPATRIATES How are retirement benefits provided for traditional expatriates? Through an international plan 5% Remain in home country plan 63% Case by case; no set approach 7% Covered under headquarters plan 5% Covered under host country plan 6% Through a regional plan 2% We do not have this group 10% Other 2%MERCER 4
  6. 6. LOCALIZATIONWHAT HAPPENS TO PENSION BENEFITS WHEN LOCALIZED? Host plan, no special treatment 18% of home service 18% 14% Case-by-case 11% Host plan with transfer of 12% benefits where possible 8% 12% Remain in home plan 5% Most cases 1% Other All cases 3%MERCER 5
  7. 7. APPROACHES TO PROVIDING BENEFITSMEDICAL HOME COUNTRY HOST COUNTRY INTERNATIONAL PLAN • Aligns with employee • Equity between expats • Common design; equity expectations and locals among expatriates • Reinforces assignment’s • Benefits appropriate to • Reduces administration temporary nature host country effort • Maintains equity with • Local employer costs • Relieves financial, time home country peers in line with domestic resource constraints burden • Aligns with home • Often anticipated by country Social Security • Local tax relief – both Social Security corporate and personal • Avoids problems with reciprocity agreements pre-existing conditionsMERCER
  8. 8. INTERNATIONAL MEDICALCOST CONTAINMENT MEASURES 57% 50% 42% 28% 25% 20% 3% Employee Co-insurance Annual Restrictions Annual claims Claims pre- Other deductible benefits limits on providers / cap authorisation networksMERCER
  9. 9. Mercer Limited is authorised and regulated by the Financial Services AuthorityRegistered in England No. 984275 Registered Office: 1 Tower Place West, Tower Place, London EC3R 5BU

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