Moving on: Global retirement benefits in a post-defined benefits world

A PwC survey of global multinationals

Multinationals are working through the biggest change in benefits strategy that we’ve ever seen.

Our major multinational clients asked us to carry out this survey because, like us, they’re increasingly concerned that the risks associated with their global retirement benefits outweigh their value to the organisation and its stakeholders. Competition has never been so fierce in the marketplace, meaning employers need to be at the very top of their game at a time when many are tackling a defined benefit (DB) legacy that could prove crippling.

The results of the survey confirm that DB arrangements are indeed a thing of the past and defined contribution (DC) plans are widely accepted as the preferred alternative. But large and dangerous legacy DB liabilities remain and employers aren’t yet satisfied that the optimal DC alternatives are in place.  Our survey uncovers the thinking of major multinationals and the actions that employers are contemplating.

Survey headlines:

The death of DB pensions is a global phenomenon
Only 6% feel that DB arrangements are the best way to provide pensions to employees
Legacy DB obligations are seen as a huge risk
80% are concerned about the adverse impact of legacy DB liabilities 
Employers have a new role
91% feel it’s important that employers help employees to make informed decisions about their retirement savings
Flexibility is seen as essential
Over 90% believe they need to give more flexibility to their employees - in the way they save for retirement and in how and when they can use their benefits
Pension governance and control is a work-in-progress – striking the right balance between local and central decision making
73% feel that they have variable quality or insufficient information about local benefit arrangements in order to make well-informed decisions. 

 

For the full survey findings and analysis, please click here.