Sector spotlight - Issues in Financial Services

Companies Sponsoring Pension Plans
Pension plan sponsors traditionally have relied on actuarial valuations and asset-only portfolio management strategies in developing their pension asset policies. Working with their investment managers and other financial advisors, the plan sponsor's goal has been to diversify the portfolio and manage performance against market benchmarks. However, this traditional approach does not adequately consider the long-term nature of plan liabilities and has been shown to be ineffective at reducing the level of volatility on pension expense.

New U.S. Health Reforms Create New Benefits Costs and Opportunities
Companies face unprecedented change and potentially new opportunities as a result of health reform (the Patient Protection and Affordable Care Act, or PPACA). They will need to reassess current benefit eligibility and plan options, as well as workforce strategies, in light of new marketplace dynamics related to benefits, rewards and health strategy. This new equilibrium will be driven by demographic and employment dynamics, U.S. tax policy, continued globalization, and new challenges and opportunities.

Securing the talent to succeed
There is a huge gap between financial services organisations' growth aspirations and the availability of talent in key growth locations to make this possible. Most organisations are relying on needlessly costly and unsustainable short-term responses. Securing the talent to succeed looks at the smart way to make sure your business has the right people, with the right skills, in the right places to realise your goals.

The key to meeting objectives and responding to opportunities more quickly and decisively than competitors is a durable workforce plan, along with the analytical systems, talent mapping and organisational co-ordination needed to make these plans effective. Key competitive benefits include a more cost-effective and precisely targeted approach to international assignments and the improved ability to attract, retain and make the most of talent in increasingly competitive growth markets.

Ed Donovan, PwC