State Street Publishes DC Plan Resource for Multi-Nationals

The paper provides insights to help multi-national companies with defined contribution plans (DC) in different countries.

State Street Global Advisors (SSGA), the asset management business of State Street Corporation, released “Ten Best Practices for Global DC Plans.”

The paper provides insights to help multi-national companies with defined contribution plans (DC) in different countries approach them strategically to attract and retain talent and produce better retirement outcomes for employees.

The “Ten Best Practices for Global DC Plans” fall into four categories:

  • Define a global vision and related goals and align benefits to support those goals;
  • Build efficient governance structures to minimize risk and ensure that plans in different countries support the overall goals;
  • Weigh the pros and cons of centralizing investment and other functions to achieve operational and cost efficiencies; and
  • Improve plans’ effectiveness for employees.

“In our discussions, we recognized that many clients find themselves with a patchwork collection of DC plans around the world, an accidental DC structure that developed as companies have grown globally over time,” says Nigel Aston, managing director, head of European Defined Contribution for SSGA. “The relatively simple step of articulating an overarching strategy can improve efficiencies between departments and divisions around the world, such as human resources, finance and legal that influence employee rewards. Our hope is that these principles will help improve the efficacy of DC plans and benefits packages as a whole.”

NEXT: Recommendations from the paper.

SSGA conducted dedicated listening campaigns with multi-national clients in the U.S., UK, continental Europe and Asia Pacific and China. This outreach included the first of a series of global forums to encourage dialogue and better understand, articulate and refine DC practices. SSGA also engaged consultants, academics and other practitioners to incorporate their views and gather strategic insights.

SSGA’s “Ten Best Practices for Global DC Plans” include the following recommendations:

  • Articulate total rewards goals globally, ensuring that they reflect the company’s core brand, culture and values. Those goals should be used to craft a strategic blueprint for the company’s retirement plan. Other goals, such as replacement ratios or other metrics needed to affirm the value of an overarching strategy, should also be included.
  • Seek ever-closer interaction between benefit functions globally. Recognize that DC plans fit into a wider network of benefits that may differ from country to country but must be considered in aggregate. Make sure to align the individual benefits in each country’s DC plan as closely as possible to the overall strategic vision.
  • Improve the plans’ ability to achieve plan objectives for employees globally. Work systematically to understand employee needs and priorities through research, employee data analysis, surveys and engagement. Use that data to drive higher savings rates, improved investment options and higher employee engagement globally.
  • Create a strong communications program that drives greater employee engagement with the retirement plan, improves retirement outcomes and builds employees’ confidence in their ability to retire.

The full paper is available to view here.