International Benefits

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These executive summaries were compiled from EMPLOYEE BENEFITS INFOSOURCE database, a source for information on employee benefits and human resources.

Colombia's Universal Health Insurance System.
Giedion, Ursula; Uribe, Manuela Villar; Health Affairs; v28 no3 pp 853-863 May-Jun 2009; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : Since 1993, Colombia has had a universal health care scheme that insures more than 80 percent of the country's population. Data from Colombia's 1995 and 2005 Demographic and Health Surveys and the 2003 Living Standards Measurement Survey have allowed analysts to evaluate the impact of universal health insurance. Analysis finds that access has improved for all health services and the incidence of catastrophic health spending has gone down. These trends are even more noticeable among disadvantaged groups such as the poor and those in rural areas.
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Early Results From Thailand's 30 Baht Health Reform: Something to Smile About.
Damrongplasit, Kannika; Melnick, Glenn A.; Health Affairs; v28 no3 pp w457-w466 suppl. May-Jun 2009; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : Universal health coverage efforts are often hampered by limited supply, reducing access for individuals already in the system. In many countries, a system of informal payments arises, extracting off-the-record payments for medical services. In 2001, Thailand implemented a system under which no individual would be charged more than 30 baht, about $0.84, for most medical procedures. Analysis of data from Thailand's national Health and Welfare Survey shows that the system has produced near universal coverage with no reduction in access for those with prior coverage and no informal payment system.
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Relocating Employees Overseas: Beyond Cost Projection and Into the World of Cost Modeling.
O'Neill, James; Compensation and Benefits Review; v41 no3 pp 55-60 May-Jun 2009; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : The cost of sending an employee abroad is typically two to three times as much as basic salary, considering extra expenses and incentives. An audit can clarify actual expenses, and cost modeling can provide real figures under various scenarios for an informed decision. Projections should take into account preassignment activities and preparation, temporary and long term housing and transportation costs, taxes, costs for spouses and dependents, repatriation and various outside services. Cost modeling enables analysis of the effects of various factors. Modeling presents results for comparison, for example, changing the time, amount, and availability of a foreign service premium.
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U.K. Pension Deficits Grow as Investment Yields Slump.
Veysey, Sarah; Business Insurance; v43 no16 pp 4, 46 Apr 20, 2009; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : Weak bond returns and declining asset values more than tripled the deficit levels of United Kingdom defined benefit (DB) pension plans between March 2008 and March 2009. The number of funds with surplus assets fell to about one third of the March 2008 count, and among remaining overfunded plans, the average surplus levels dropped over 80 percent. Firms must boost contributions or accept chronic underfunding. However, David Norgrove, U.K. Pensions Regulator, stated they should not have to go into bankruptcy due to a pension deficit. Employers are increasingly likely to freeze DB plans not only for new hires but for all employees and move to defined contribution plans.
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Determining Factors Leading Affiliates to Transfer From an Individual Accounts Pension Scheme to a Pay-as-You-Go Pension Scheme: Evidence From Argentina.
d'Elia, Vanesa Valeria; International Social Security Review; v62 no2 pp 55-76 Apr-Jun 2009; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : In 2007 Argentina adopted its Integrated Social Security System, which enables individuals to maintain their own defined contribution accounts or move to a public pay-as-you-go (PAYG) system. Analysis of plan participants' transfer profiles shows affiliates moving to the PAYG scheme are most likely to be in the middle income range, salaried, married, female and under age 41. Individuals make transfers to maximize their ultimate benefits. Low income workers have been less likely to transfer even when they would gain financially, indicating they may need more information about the implications.
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Expatriate Home Leave Policy in a Volatile Economy.
McMorrow, Virginia G.; Cummins, Siobhan; Benefits & Compensation International; v38 no8 pp 18-19 Apr 2009; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : Periodic home leave provides expatriates time to strengthen ties with family, community and the employer. A review of home leave policies shows annual leave is most common, though firms providing semiannual visits rose from 12 percent in 2006 to 15 percent in 2008. Employers typically cover economy class travel expenses but may increase coverage for longer travel time. Costs related with business activity at a local office is usually compensated. More expatriates are opting to use home visit time for other travel, but employers are increasingly unwilling to support these costs beyond the cost for a home visit, and some do not compensate for alternative travel at all.
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Latin America: Privatized Pension Funds in Mexico Compared With Elsewhere.
Sinha, Tapen; Benefits & Compensation International; v38 no8 pp 3-7 Apr 2009; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : Among Latin American countries, Chile led the way in adopting a pay-as-you-go pension scheme in 1980, following the World Bank's recommendation for a three pillar system. Mexico's more recent move toward reform has been dramatic, with enrollment growth greatly exceeding most other countries. Yet only 38 percent of Mexican participants contribute regularly, due to low salaries and deferral percentage and the numbers of low wage workers in the informal economic sector. Mexico's pension funds are growing and will have little outflow until about 2025, while countries with more mature pensions are already drawing down funds. Pension funds in countries like Mexico with large allocations to government bonds are financially strong.
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Pension System Generosity and Reform in Algeria, Morocco and Tunisia.
Ben Braham, Mehdi; International Social Security Review; v62 no2 pp 101-120 Apr-Jun 2009; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : The pay-as-you-go pension systems in Algeria, Morocco and Tunisia are similar in each having high administrative costs and low participation levels yet generous benefits. The degree of disequilibrium of the schemes is unsustainable and demands reform. The countries could raise the retirement age and increase contribution rates, or take a systemic approach by adopting a funded approach. Uncertainty about pension fund investment performance and returns and a stable financial market infrastructure with appropriate regulation combine to make systemic reform challenging. Algeria would face special challenges to comply with Islamic law.
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The "X Component" in Shanghai's Social Security Reforms.
Davies, Gloria; Nielsen, Ingrid; Nyland, Chris; Smyth, Russell; Zhu, Cherrie; Zhu, Judith; International Social Security Review; v62 no2 pp 31-54 Apr-Jun 2009; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : The People's Republic of China adopted the town insurance or 25 plus X as a social welfare reform in 2003. The purpose is to broaden coverage and improve retirement benefits, expanding coverage to those in rural areas for whom the existing urban insurance scheme was not available. Employers pay 25 percent of monthly payroll plus extra contributions for health or additional pension benefits, and incentives encourage additional employer and employee contributions. Analysis for the Shanghai area shows 58.45 percent of those who lost their land use rights receiving better coverage than before. But the 41.55 percent who formerly had coverage under the urban scheme receive less benefits, and the plus X component has seen little use.
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Foreign Plans: OECD Advises Members to Manage Risk, Improve Pension Coverage for Individuals.
Mitchell, Rick; BNA's Pension & Benefits Reporter; v36 p 470 Mar 3, 2009; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : The Organization for Economic Cooperation and Development (OECD) has released its 2008 OECD Private Pensions Outlook, which says that private pension systems and other private savings are the only ways individuals in most member countries will be able to maintain their standard of living in retirement. The report said that in countries without relatively high public pensions for low income individuals, governments should focus their efforts on expanding coverage for middle and low income workers. It also said that there is a critical need for information on private pension evolution and performance. The financial crises of the decade from 1999 to 2008, according to the report, should make members realize the need for better monitoring, regulation, transparency, governance and risk management for private pension funds.
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Dual-Career Issues: Providing Help in a Time of Economic Uncertainty.
Cummins, Siobhan; International HR Journal; v18 no2 pp 8-12 Spring 2009; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : According to ORC Worldwide's Dual Careers and International Assignments Survey, the 2008 economic downturn and demographic changes are significantly affecting the management of dual career expatriate assignments. Over half the companies surveyed provided no monetary assistance for dual career couples during assignments, and fewer than one in five assisted returning partners or spouses. Survey participants offered some advice for helping employees deal with dual career issues, including clearly communicating information about the assignment to spouses and partners, offering more support to spouses or partners who want to work while abroad and considering family issues when assessing candidates for expatriate assignments. Assisting partners who want to work can build loyalty in an employee who has taken on an international assignment.
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Four More Studies Forecast Revisions for Pay in 2009.
Report on Salary Surveys; no09-03 pp 2-4 Mar 2009; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : Studies by Mercer, CareerBuilder.com, WorldatWork and Hewitt Associates forecast salary freezes or minimal increases, slow hiring and more modest raises than originally planned. Revised data for early 2009 update that gleaned in mid- to late 2008. Only one in three firms plan to offer higher salaries for new hires, cutting the likelihood of gain from switching jobs. WorldatWork found actual salary increases down from the projected 3.9 percent to 3.1 percent, and executives at 17 percent of responding firms would see no increase. Hewitt found 67 percent of European companies and 66 percent of firms in Latin America will cut pay, compared with 39 percent of U.S. firms, and layoffs are twice as likely in Europe than in the U.S.
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Global Incentive Plans: Enforceability of Clawback Provisions.
Burke, June Anne; Benefits & Compensation International; v38 no7 pp 12-13, 16-17 Mar 2009; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : Inclusion of clawback provisions in executive compensation packages is surging. Beyond state laws varying in their ability to enforce the provisions, countries outside the U.S. may mandate continuation of salaries or certain benefits for a contract period. Noncompete agreements may be useless unless country specific criteria are met. Companies might specify the legal forum in contracts to avoid being subject to rules in the country of employment, but this strategy is not always successful. Employers should tailor provisions around knowledge of national restrictions that would limit how clawbacks can be enforced.
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Layoffs Outside the U.S.
Dowling, Donald C., Jr.; Employee Benefit Plan Review; v63 no9 pp 15-16 Mar 2009; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : Multinational firms contemplating layoffs outside the U.S. must appreciate that the process is significantly different in other countries laden with several layers of laws, making standard modeling strategies irrelevant. Employers must be aware of termination limits in individual and group employment contracts, severance pay variations and the need to notify and involve government agencies or the courts. Companies must actively work with unions and work councils to avoid layoffs rather than presenting a fait accompli. Employers should develop a comprehensive strategy with distinct provisions to meet each affected country's unique rules.
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Medical Travel Can Save Money During Bad Economy, but at What Cost?
Johnsrud, Thomas; Journal of Compensation and Benefits; v25 no2 pp 19-22 Mar-Apr 2009; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : Americans and their employers are seeking ways to control soaring health care costs, and medical tourism is a growing option, with limits. Employers looking at international providers must demand the highest quality in clinical care and service, transparent pricing, Joint Commission International hospital accreditation, long standing support from government ministries of health and tourism and a strong safety record. Physicians must be board certified in specialty areas, speak English, experienced and willing to collaborate with U.S. physicians for followup care. Meeting these and other standards, Singapore has become a top spot for medical tourism.
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Multiple Choice.
Chordas, Lori; Best's Review; v109 no11 pp 65-67 Mar 2009; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : Multinational companies are challenged to provide the right mix of benefits for employees around the world. Rather than offering a standard benefits package, the preferred approach is to establish global priorities based on a company's philosophy toward benefits and work out details locally. With social insurance declining in many countries, the need for supplemental retirement and health plans is growing. For funding, multinational pooling and the use of captive insurance companies can help. A benefits broker can help guide companies through options, starting with an international benefits audit, taking local compliance issues into account and negotiating with global insurers.
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Preparation and Data Management Are Key for a Successful Expatriate Program.
Micciche, Tracy; Employment Relations Today; v36 no1 pp 35-39 Spring 2009; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : As expatriate programs come under increasing scrutiny and companies face pressure to manage costs, it is important to get the most out of expatriate programs. It is imperative to select the right employees for expatriate assignments and to make sure they have the necessary support in their new country. Employees and their families should be prepared, and all parties, including the employer, should have a clear understanding of what to expect during the assignment. A centralized system for tracking employees, identifying where they are receiving compensation and managing their taxation can help with one of the biggest challenges of managing an expatriate population.
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Retirement Funds in Israel: An Update.
Brandman, Maurice; Benefits & Compensation International; v38 no7 pp 18-21 Mar 2009; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : Pension reforms in Israel since the 1980s have moved toward hybrid and defined contribution plans with increasing reliance on direct or indirect investments in the financial markets. The economic downturn of 2008 saw retirement savings fall by 11 percent to 20 percent. Older employees' savings may not be able to recover their losses, and government proposals for a safety net will offer little help. Employers can review the investment options they offer, or preferably, the government can eliminate the requirement that 30 percent of pension funds to be in index linked, dedicated government bond issues.
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Risk Benefits for Expatriates.
Plaugmann, Michael; Benefits & Compensation International; v38 no7 pp 8-10 Mar 2009; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : With the expansion of international assignments, employers are faced with providing health care benefits that meet expatriates' needs and comply with widely diverse local regulations. A growing number of countries require that insurance be provided through a local company and treatment expenditures stay within the country. Insurance premiums are rising from a higher risk insurance market dealing with international unrest, AIDS and other health threats and stress caused by absence. An employer's best approach is to partner with an international insurer having expertise in local regulations governing health care delivery.
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The Battle to Retain Expatriate Employees: Health Benefits With Advocacy Services.
Fleet, Samuel H.; Compensation and Benefits Review; v41 no2 pp 39-43 Mar-Apr 2009; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : Employers hoping to get the most out of their investment in expatriate employees must make health benefit packages generous, competitive and easy to use. The best option is to work with an experienced partner or third party administrator who understands local country requirements and can link with full service and financially stable providers. Expats expect easy access to high quality care, good communication and streamlined payment processes, an advocate to handle any special challenges and evacuation if needed. Employers who alleviate expats' health concerns are more likely to retain these valuable workers.
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Deregulation: Back to the Future?
Knowles, Rosalind; Pensions; v14 no1 pp 53-57 Feb 2009; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : United Kingdom regulation over pension systems has multiplied since the 1970s when employers had nearly free control. Significant additions include mandatory limited price indexation and revaluation for occupational pensions and provisions tantamount to minimum benefits for most members. The weak Pensions Act 2004 missed the opportunity for real simplification. A review in 2007 produced well-intentioned but limited proposals and a choice to ignore certain issues ripe for deregulation, and another review was started in 2008. Changes have largely protected existing pensions without protecting against future risk.
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Employee Benefits of Corporate Self-Invested Pension Plans.
Hutchinson, Philip; Pensions; v14 no1 pp 28-35 Feb 2009; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : A British corporate self-invested pension plan (CSIPP) is a company-sponsored plan that provides employees with investment control and flexibility while enabling employers to sponsor lifecycle funds as an alternative to a defined benefit plan. A CSIPP might be integrated into an existing benefits structure to replace several legacy pension plans, but it is not suited for all circumstances. Its success depends on design structure, investments, pricing, and contributions and transfers, together with effective plan communication.
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Moving From Pay-as-You-Go to Privately Managed Individual Pension Accounts: What Have We Learned After 25 Years of the Chilean Pension Reform?
Vial, Joaquin; Melguizo, Angel; Pensions; v14 no1 pp 14-27 Feb 2009; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : Chile moved from a pay-as-you-go pension system to individual retirement accounts in 1981. After 25 years, the system has proved to be solid, fair and successful. The original reform benefited from coinciding with major capital gains in the early 1990s. Further reforms were required in 2006 to protect low income earners unable to contribute as much as anticipated. A continuing high rate of economic growth is needed to maintain the reforms' success, involving changes in the labor market and compensation. Keys to success included effective financial market regulation and a transition plan.
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The 'New' Paternalism, Consultation and Consent: Expectations of UK Participants in Defined Contribution and Self-Directed Retirement Savings Schemes.
Clark, Gordon L.; Knox-Hayes, Janelle; Pensions; v14 no1 pp 58-74 Feb 2009; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : Changes in approaches to retirement saving in the United Kingdom have increasingly moved responsibility for retirement security toward individuals. Automatic design features that lessen the burden retain a degree of paternalism balanced by opt out flexibility. A 2006 survey of almost 1,000 U.K. participants in defined contribution and self-directed investment plans revealed preferences for being consulted about changing asset allocation leading up to retirement. Those who understood long term planning and valued the company plan were most likely to want to be consulted. A significant portion of those polled replied they did not know if they wanted consultation, suggesting lack of knowledge, engagement or confidence in long term planning. Degrees of paternalism may be appropriate for these subgroups.
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Developments in Global M&As and Divestitures.
Hukins, Elisa; Williams, Gareth; Benefits & Compensation International; v38 no6 pp 7-11 Jan-Feb 2009; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : International mergers and acquisitions are increasingly commonplace among midmarket companies in the early 20th century. The first priority when preparing for a merger or acquisition is to understand the business rationale for the deal and the structure of the merged company. Only then can the difficult task of defining and addressing the cultural aspects of the integration begin. A successful merger or acquisition requires a human resources project management office with clear strategic and operational requirements, alignment and governance protocols, rigorous results management, an experienced team and excellent tools and methods.
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