GLOBAL - Two-thirds of companies with international pension plans now use defined contribution arrangements, according to a survey from Mercer Human Resource Consulting.

The survey found that defined benefit provision for globally mobile employees would continue to decline. And it found that two-thirds of companies with international pension plans now use DC arrangements.

Ten percent of firms offering a DB plan aim to close it in favour of a DC scheme in the near future.

The findings came in the firm’s ‘Expatriate and Third-Country Nationals Benefits Survey’ – which polled some 230 multinationals.

“Ten years ago some three-quarters of international pension plans were defined benefit,” worldwide partner Giles Archibald.

“Now, most multinational companies, particularly those with European headquarters, offer their mobile employees a defined contribution pension. Interestingly, almost all of the defined benefit plans that remain are open to new entrants.”

Mercer also found that European organisations were more likely to have a DC plan for their globally mobile employees than their North American counterparts - 71% compared to 50%.

And average pension contributions by European employers tended to be greater, at 8%, compared with 6% across the Atlantic.

“As DC plans become increasingly popular and managing them more onerous, more companies are likely to outsource the administration of their benefit programmes,” Archibald said.

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