BOSTON--(BUSINESS WIRE)--State Street Global Advisors (SSGA), the asset management business of State Street Corporation (NYSE:STT), today introduced their “Ten Best Practices for Global DC Plans.” The paper provides insights to help multi-national clients with defined contribution plans (DC) in different countries approach them strategically to attract and retain talent and produce better retirement outcomes for employees.
“The need to achieve retirement security is a global concern. We found that clients are seeking a guiding strategy and unifying goals to direct their efforts globally,” said Fredrik Axsater, global head of Defined Contribution at SSGA. “We developed these ten guiding principles to help clients improve the retirement readiness of their employees through their DC plans.”
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
- 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,” said 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.”
SSGA conducted dedicated listening campaigns with multi-national clients in the US, UK, continental Europe and APAC. 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.
About State Street Global Advisors
For nearly four decades, State Street Global Advisors has been committed to helping our clients, and those who rely on them, achieve financial security. We partner with many of the world’s largest, most sophisticated investors and financial intermediaries to help them reach their goals through a rigorous, research-driven investment process spanning both indexing and active disciplines. With trillions* in assets, our scale and global reach offer clients unrivaled access to markets, geographies and asset classes, and allow us to deliver thoughtful insights and innovative solutions.
State Street Global Advisors is the investment management arm of State Street Corporation.
*Assets under management were $2.4 trillion as of March 31, 2015. This AUM includes assets (approximately $28 billion as of March 31, 2015) for which State Street Global Markets, LLC, an affiliate of State Street Global Advisors, serves as the marketing agent.