INTERNATIONAL REWARD
Survey of employee benefits for expatriates
More and more multi-national businesses are moving away from final salary pension schemes for expatriate employees, according to a survey by consultants William M Mercer.
The figures gathered by Mercer show that only 42% of organisations now offer employees final salary schemes, compared with 79% 10 years ago.
| Key findings of Mercer research |
| Retirement plans |
| Just over half of the surveyed companies operate special retirement plans for expatriates. They are used for employees on longer-term assignments — mainly because of the tax and legal problems associated with keeping these employees in existing company arrangements. |
| Defined contribution plans |
| 73% of companies with European headquarters offer defined contribution arrangements, compared with 41% in North America. |
| Cost of retirement plans |
| European retirement plans tend to cost sponsoring employers more than their North American counterparts. For defined contribution arrangements, the median fixed employer contribution rate in Europe is 12%, compared to just 5% across the Atlantic. |
| Medical benefits |
| International medical plans are becoming more popular: 53% of companies now provide such cover to at least some expatriates, up from 29% in 1991. |
| Death and disability benefits |
| The most common level of death benefit is two times salary. The long-term disability benefit provided by most companies is 60% of salary. |
| Emergency assistance |
| 85% of companies provide assistance, ranging from choosing a local doctor to emergency evacuation. |
| Tax equalisation |
| 80% of companies "gross up" salaries for expatriates to equalise the effect of any extra tax incurred as a result of an assignment. |
Want to know more?
Title: The 2001 Retirement and Benefits Survey for Third-Country Nationals, published by William M Mercer.
Methodology: The survey is based in information received from 133 companies, of which 102 have headquarters in North America and 31 in Europe. The surveyed companies employ an average of 200 expatriates.
Availability: Visit Mercer at www.imercer.com/international, then click on "Reports and Publications," or tel: +1 800 333 3070.