As companies continue their international expansion, their need for proper employee benefit arrangements and related financing also expand. There is no doubt that adopting a co-ordinated approach to this can lead to a motivated workforce and bring about cost savings -- but how do you set about doing it?

The Global Perspective

If you are responsible for the workforce of a multinational company, you will know that benefit structures differ widely from country to country. A typical employee in the US expects to be offered private medical insurance, a similar employee in the UK would see it as less of a priority. It can be difficult to keep up with what employees in different countries expect and are entitled to by law.

Co-ordinating benefits across different countries can also be an enormous challenge, particularly where you have employees who move around frequently. Having an expert to advise you on international employee benefit issues can help take the strain off your shoulders.

Added Value

Our full range of services includes:

• Comparing benefits with local competitors and group policy -- we are well equipped to provide 'over the shoulder' advice to corporate headquarters in connection with benefit levels in overseas territories
• Analysing financing arrangements used for employee benefits and advising on restructuring where necessary -- we can advise on all areas that affect the financing of employee benefits in a given country, including the choice of mechanisms available, appropriate investment strategy, the providers' terms and conditions, fiscal efficiency and economies of scale that can be achieved
• Advising on the structure and efficiency of multinational pooling arrangements -- and the use of an employee benefits reinsurance captive
• Advising on acquisitions and disposals -- it is vital that the benefit aspects of these transactions are fully understood by the negotiators in all relevant jurisdictions. In many countries there is no automatic protection of employees 'acquired rights' so action must be taken to ensure that employees receive a 'fair deal' and that the employer does not suffer financially
• Advising on the benefit, financing and fiscal solutions available to internationally mobile employees -- the increasing vigilance of tax authorities in different countries to the membership by mobile employees of foreign (i.e. non-local) pension arrangements makes this particularly important
• Co-ordinating international accounting figures -- we are the appointed actuary for worldwide actuarial valuations for many large multinationals whose stock exchange listings require appropriate calculations and disclosure

Selecting the Best

We have built up detailed knowledge and experience of the issues affecting multinational companies in the areas of employee benefit arrangements. We have carried out benefit reviews and advised on financing arrangements for a large range of companies from all industry sectors.

We have a highly experienced, committed, international multi-disciplinary team who will match their knowledge and expertise with your needs and expectations.

Here's some of the work we've done for clients:

Acquisition of a Swiss-Based Mulinational

We assisted one of our clients in the acquisition of a multinational company based in Switzerland but with significant operations also in Japan, Singapore and the United States.

During the due diligence process a company sponsored "social plan" was identified in Switzerland which had originally been used to provide generous early retirement benefits associated with a redundancy programme. It transpired that although the redundancy programme had ended some years previously, employees retiring early were still granted benefits under the social plan and that there was now an expectation that enhanced benefits would be provided on any early retirement.

We estimated the liability and cost associated with the additional early retirement benefits and our client was able to use this information to negotiate a price reduction from the Seller.

Mobile Employees

As part of a major restructuring programme, a multinational corporation established a number of new subsidiaries which were subsequently sold.

Amongst other tasks in this project, we were asked to advise on how to structure the retirement arrangements so that the expatriate employees, who were key to the success of the new companies, would be reassured that their pension benefits were secure and would not be materially affected by the transactions.

Special provisions were built into some of the new companies pension plans in order to accomplish these goals and one of our expatriate experts, together with a company representative, visited each of the sites to explain to the key expatriate employees to explain how their pension benefits would be provided.

Partly as a result of this the great majority of the key employees were retained and the divestiture programme was great success.

International Plan

Some multinational corporations establish international pension plans. We have assisted a number of corporations with significant numbers of mobile employees resident in the UK establish such plans. These plans are often popular, since if they are properly structured it is possible that UK tax relief can be obtained on contributions (or bonus deferrals) paid into plan, and depending on tax residence at retirement, it may be possible to minimise tax on benefits paid from the plan.

Client Case Studies

Acquisition of a Swiss-Based Multinational

Mobile Employees

Contact Ian Hinton via email or by phone at +44 (0) 20 7939 4441.