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As many workers are being hit by large losses to their retirement funds, a significant number of older workers are planning to delay their retirement, according to findings from a recent survey conducted by Watson Wyatt. [June 25, 2009] With signs that an economic recovery might be nearing, a majority of U.S. employers plan to reverse some, but not all, of the changes they’ve been making to their pay, benefits and other HR programs, according to the latest update to an ongoing series of surveys by Watson Wyatt. [June 25, 2009] The U.A.E government is considering implementing new employment legislation that will improve foreign workers’ labor conditions and protect their rights. The decision to make it compulsory for employers to provide workers with accommodation in line with the international labor standards has been approved. From September 2009, employers will have 5 years to comply with the new rules. [June 24, 2009] Superannuation Plans (SPs) and Approved Deposit Funds (ADFs) could become subject to a new accounting standard, in accordance with an exposure draft issued in May 2009 by the Australian Accounting Standards Board (AASB). The proposed standard would require additional financial statements, more detailed disclosures with respect to member benefits and a new approach to measuring defined benefit obligations. [June 24, 2009] The International Accounting Standards Board (IASB) has recently proposed an amendment to IFRIC 14 (The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction) that affects asset ceiling calculations under IAS 19. The IASB will receive comments on this draft until July 27, 2009. [June 23, 2009] On April 30, 2009, the Estonian government approved an increase in both employer and employee contributions to the unemployment insurance fund. This measure aims to improve the sustainability of the fund in the context of the current economic crisis. It is expected that another review that will include a reduction in the benefits paid out will take place in the near future. [May 31, 2009] In May 2009, committees at the House of Representatives and the Senate held various discussions on expanding health care coverage and health care reform. Lawmakers are working to draft legislation that will begin moving through the committee and the floor debate process in June. [May 31, 2009] The Obama administration is reportedly considering the creation of a regulatory body to oversee the banking industry. If this proposal is carried through, the new agency would replace several agencies that currently oversee different aspects of the financial markets. [May 30, 2009] The Peruvian Congress has approved a proposal to cut the amount that workers contribute towards benefits such as pension and health care. In a separate decision, Congress also approved a measure that will enable workers to make withdrawals from their temporary compensation reserves during the next year. Both these laws were approved on April 29, 2009, and serve to provide some relief to workers and counteract the effects of the current economic crisis. [May 29, 2009]  Employer Action Code: Act
Latin America/Caribbean - Bolivia: Labor regulations tightened
Three new labor regulations passed on May 1, 2009 extend employers’ responsibilities to their workers in Bolivia. These new regulations include changes in severance payment eligibility, new provisions to establish a decent working environment and the extension of equal treatment to workers who only work indirectly for the company. [May 28, 2009] Starting May 1, 2009, employers will be able to make an interim claim for the early reimbursement of maternity leave remuneration paid by the government. The purpose of this measure is to reduce the current cost pressures on employers, as well as to foster a more family-friendly work environment. [May 27, 2009] On April 29, 2009, the Irish Senate approved measures to assist members of insolvent defined benefit (DB) plans. These measures, among others, form part of the 2009 Social Welfare and Pensions Bill, and have created a Pensions Insolvency Payment Scheme (PIPS), changed wind-up priorities and strengthened regulation and the ability to restructure DB pension plans. [May 26, 2009] Effective July 1, 2009, the state will start paying sick leave compensation on the ninth day of leave taken, instead of the second day as is currently the case. [May 26, 2009] Watson Wyatt analysis has found that, for the first time, the majority of Fortune 100 companies now offer new salaried employees only a defined contribution (DC) plan, such as a 401(k), rather than a traditional defined benefit (DB) plan. In another first, more Fortune 100 companies are also offering hybrid pension plans, such as account-based cash balance plans, than DB plans. [May 25, 2009] Working mothers who are the primary caregivers of a newborn or adopted child will be eligible for 18 weeks of paid parental leave, if a proposal in the Australian Budget 2009-10 is implemented. [May 25, 2009] The Slovak Parliament has approved an amendment to the Pension System Act to guarantee member accounts in the nation’s second-pillar pension system. This measure, which aims to stimulate private pension fund activity and protect members from the effects of the current economic downturn, comes into effect on July 1, 2009. The amendment has also changed the fees that pension fund management companies can charge. [May 25, 2009] Strict limits have been placed on the bonuses of executives of companies (in particular banks and companies in the automotive industry) that have received state aid. This measure was taken after it transpired that a major French bank, Société Générale, which had received state funding as a result of being hard hit by the financial crisis, went on to pay large bonuses to its top executives. [May 22, 2009] A series of reforms has been introduced to New Zealand’s KiwiSaver plans effective April 1, 2009. These measures aim to provide relief to workers and counteract to some extent the effects of the current economic downturn. [May 22, 2009] The Australian Budget, announced on May 12, 2009, contains a broad range of measures that will affect various aspects of superannuation and retirement income plans in Australia. Of particular interest are the reduction in the concessional contribution cap, the extension of the current pension drawdown relief period and the plans to introduce a trans-Tasman savings portability plan. [May 21, 2009] Effective June 1, 2009, eligibility requirements for work permits and Green Card applications in Ireland are being revised with the result that the qualifying conditions for non-European Economic Area nationals are likely to become much stricter. [May 20, 2009] In a move to help retail investors better understand their fund’s long-term investment performance, changes announced by the Minister for Superannuation and Corporate Law on April 1, 2009 will require all superannuation funds to include long-term returns in their member statements issued on or after July 1, 2009. [April 30, 2009] A new labor law to expand rights for workers has been approved in principle by the Kuwaiti Parliament. The law is expected to replace a 45-year-old law, which has been under revision in Parliament for over a decade and was seen as being favorable to employers over employees. [April 30, 2009] A law that facilitates the creation of a new private-sector defined contribution pension plan that will be available to all employers, employees and self-employed persons in the province has been approved by the British Columbia government. The Pension Benefit Standards Amendment Act received Royal Assent on March 31, 2009 and is expected to come into force in 2010. [April 30, 2009] On April 3, 2009, in the most fundamental reform of Germany’s local GAAP (General Accepted Accounting Principles) in 20 years, the Bundesrat ratified the Financial Standard Reform Act, or Bilanzrechtsmodernisierungsgesetz. [April 30, 2009] On April 22, 2009, the Chancellor of the Exchequer announced the 2009 Budget, which contained measures restricting higher rate tax relief on pension contributions for high-income earners. These proposals, which will come fully into force in April 2011, add a layer of complexity for pension plan members and employers. Particularly for employers, they may lead to a need to review remuneration packages for executives, and especially new recruits. [April 28, 2009] Tax-deferred employee contributions to defined contribution (DC) plans would be allowed for the first time in Japan up to a tax-deductible limit, if a proposal currently being debated in the Japanese parliament passes. The proposal, which was submitted on March 6, 2009, will become effective in January 2010 if passed. [April 27, 2009] Watson Wyatt recently published a benchmark study of occupational pension plans in Germany. Among its key findings are that contribution-oriented plans are on the rise; more employers are starting to match their employees’ contributions to plans; and lump-sum benefits are becoming more popular, although the majority of plans still provide annuities. [April 27, 2009] The Department for Work and Pensions has issued a consultation (open from March 12 to June 3, 2009) on draft regulations regarding opt-outs and automatic enrollment. These regulations will support the mandatory automatic enrollment of employees into “qualifying” pension plans from 2012, as introduced by the 2008 Pensions Act. [April 24, 2009] On March 27, 2009, the Canada’s Federal Department of Finance announced draft measures to provide temporary solvency funding relief for federally-regulated defined benefit pension plans. The draft regulations, which were published for comment on April 4, 2009, offer sponsors four temporary solvency measure options for a solvency deficiency reported at the plan year-end date from November 1, 2008 to October 31, 2009. [April 24, 2009] According to new survey findings by Watson Wyatt, U.S. employers' efforts to battle the recession through cost-cutting actions such as layoffs, hiring freezes and salary freezes may have finally peaked. [April 24, 2009] On March 12, 2009, Belgium’s Corporate Governance Committee published its new Code on Corporate Governance. The Code includes a cap on severance pay for CEOs and other senior executives that will come into effect for all contractual arrangements made on or after July 1, 2009. [April 23, 2009] Effective April 6, 2009, parents (and anyone responsible for raising a child – including adopters, guardians, foster parents and step-parents) of children up to age 16 are eligible to request more flexible working schedules. Previously, this was available only to parents with children up to age six, or children up to age 18 with disabilities. [April 22, 2009] On April 2, 2009, leaders at the G20 meeting in London endorsed new principles on compensation put forward by the Financial Stability Forum. The nine principles relate to compensation governance, the alignment of compensation with risk-taking and oversight and stakeholder engagement. [April 15, 2009] The Dutch Accounting Standards Board (RJ) has published new draft guidelines for the financial reporting of employee benefits. This change represents a significant shift from the international standard (IAS19) for those companies that also report under RJ 271, particularly for assessing liabilities under defined benefit (DB) plans. [April 15, 2009] The Argentinean government has passed a set of incentives to encourage employers to register any of their employees who are currently working illegally. These measures are effective as of March 9, 2009 and include a reduction in employers’ social security contributions for the next two years. [April 15, 2009] The income ceiling on social security contributions has been raised by the Argentinean government. This March 1, 2009 ruling imposes higher rates of contribution on higher ranges of salary. [April 13, 2009] Recent Watson Wyatt research has found that many defined benefit pension funds in India are currently unfunded. Historically, companies fund their plans based on their year-end disclosed deficit positions. However, with accounting standard AS15 (revised in 2006, it brings Indian employee benefits disclosure rules broadly in line with international accounting standard IAS19), this approach may no longer be appropriate. [March 31, 2009] On February 3, 2009, the Chinese government emphasized the requirement according to the Labor Contract Law for employers to inform their employee unions, or their staff, and the local government of any mass layoff plans at least 30 days before taking action. [March 31, 2009] A new social security plan, the Unorganized Workers’ Social Security Act 2008, has been established to provide welfare for the unorganized labor sector. [March 31, 2009] The guidelines for when to file annual valuation reports were modified on March 5, 2009 by the release of Policy Bulletin 27 by Alberta Finance and Enterprise. The new rules now require some plans to file a valuation report if their funded or solvency ratio falls below 85 percent. [March 30, 2009] On March 5, 2009, the Costa Rican Social Security Fund (CCSS) announced relief measures for employers with outstanding social security obligations. These measures include extending planned payment schedules and lighter requirements for employers who have failed to make timely payments. [March 30, 2009] On February 20, 2009, Germany’s Federal Council, the Bundesrat, approved a second stimulus plan to combat pressures on the German economy caused by the global crisis. The Konjunkturpaket II is worth EUR 50 billion (USD 63 billion). [March 26, 2009] Pension funds are required to use a new minimum mortality table as of January 1, 2009, according to a 2006 ruling by the Council of Management of Complementary Retirement Plans (CGPC). The previous table was based on life expectancy up to 80 years for a 65-year-old person; under the new table this age has been increased to 83. [March 26, 2009] A recent survey has found that, despite rising health care costs, a majority of large U.S. employers are confident they will continue to offer health care benefits to workers 10 years from now. [March 25, 2009] The Finnish government has announced its intention to introduce a minimum guaranteed pension in 2011. It will also decrease and ultimately abolish employers’ state pension contributions. However, this will be partially offset by an increase in contributions to earnings-related pensions. [March 23, 2009] The Finnish government has announced a proposal to raise the minimum retirement age for those receiving earnings-related pensions. This measure is part of a plan to alleviate the pressures that an aging population is currently putting on the pension system and labor markets. [March 23, 2009]  Employer Action Code: Analyze
Latin America/Caribbean - Ecuador: Paternity leave approved
Fathers are now entitled to 10 days of paternity leave, and in some special cases up to 23 days, according to a new law approved on February 10, 2009. [March 23, 2009] A recent survey has found that the number of companies that froze salaries and added clawback policies to their executive pay programs jumped sharply between December 2008 and February 2009. It also found that many companies plan to slash funding for annual bonuses and reduce the value of long-term incentive awards. [March 23, 2009] On February 13, 2009, the Slovak government approved subsidies on companies´ compulsory health insurance and social security contributions. These measures came into effect from March 2009 and will remain in place until the end of 2010. [March 20, 2009] Effective January 13, 2009, contribution rates for unemployment and accident insurance in Ukraine have been revised. [March 20, 2009] Watson Wyatt has recently posted an updated matrix that outlines pooling arrangements around the world. [March 20, 2009] An update to an ongoing series of surveys conducted by Watson Wyatt has found that even though most companies have already made sweeping changes, such as laying employees off, to their HR programs, many expect to make further cost-cutting changes this year. Among the likely measures to be implemented are salary and hiring freezes and reduced 401(k) matching contributions. [March 20, 2009] Minimum drawdown requirements for account-based pensions will be suspended for the second half of 2008/9. This measure responds to concerns that meeting the minimum drawdown amount in 2008/9 will mean some pensioners will have to sell investment assets and realize losses within the current economic slowdown. [February 28, 2009] The Pensions Regulator (tPR) has issued a statement to employers with defined benefit (DB) pension plans, setting out its position on how the funding regime will work during the economic crisis. Most U.K. DB funds now have substantial deficits. [February 28, 2009] A new law to regulate the provisions of part-time labor contracts was approved by the Argentinean parliament on January 12, 2009. The law establishes changes in working hours and health care contributions and is expected to increase labor costs and reduce contract flexibility. [February 28, 2009] A recent Watson Wyatt survey of some of the largest companies in the United Kingdom found that many will need to make significant and potentially costly design changes to their pension plans to meet the new legal requirements linked to the introduction of Personal Accounts in three years. [February 28, 2009] A family law that introduces several amendments to Poland’s Labor Code came into effect on January 1, 2009. The new law affects the length of parental leave available to workers. [February 27, 2009] New laws have been put into place to waive remaining social security obligations for individuals and companies, give discounts on fines for late payments and reduce interest payments on arrears. These measures, which were approved on February 8, 2009, are designed to alleviate the pressures that recent limited access to liquidity has put on the private sector. [February 26, 2009] The European Parliament’s passing of the so-called "Sanctions Directive" on February 19. 2009, could open the way to establishing fines and provisions for the possible criminal prosecution of employers who knowingly hire illegal immigrants. The legislation still requires approval by the Council of Ministers before it takes effect. If approved, it could result in an increase in the administrative burden on employers. [February 26, 2009] A new plan to align Brazilian pension fund administrators’ (EFPCs) accounting rules to international standards was approved on January 26, 2009. The new regulation, which comes into effect in January 2010, aims to boost transparency, a key concern given the recent growth in Brazil’s pension sector. [February 25, 2009] The restrictions on executive compensation paid to TARP recipients under the American Recovery and Reinvestment Act are even stricter than those previously announced by the Obama administration and Treasury on February 4 – including a provision to apply these restrictions retroactively to any financial institution currently participating in TARP, with limited exceptions. [February 23, 2009] Employer Action Code: Act
Latin America/Caribbean - Colombia: Five-day leave approved Employees that suffer the death of a spouse, partner or close family member will be legally entitled to take up to five paid days off, according to a new law approved by Congress on January 5, 2009. [February 23, 2009] The Obama administration’s economic stimulus package – the American Recovery and Reinvestment Act of 2009 – was approved by Congress on February 13 and signed into law on February 17, 2009. The USD 787 billion package comprises USD 287 billion in tax relief and approximately USD 500 billion in spending and benefits programs. [February 20, 2009] The “bridge pensions” system has been approved in Poland, making eligibility conditions for early retirement much tougher from January 1, 2009. The law will reduce the number of workers who are eligible to retire early from 1.3 million to 250,000. [February 19, 2009] Legislation on taxation, social security, health care and employment have been modified to recognize same-sex couples and certain dependent children, according to two bills that have recently become law. [February 19, 2009] The final economic stimulus plan includes COBRA subsidy provisions that will require prompt attention and action from health plan sponsors. Under the new law, the government will provide a 65 percent premium subsidy for certain workers whose employment was involuntarily terminated and their dependents. [February 18, 2009] Changes in health care and state social insurance contributions were approved by the Bulgarian Parliament on October 31, 2008 as part of its 2009 Budget. Most of these changes came into effect on January 1, 2009. [February 12, 2009] The Children’s Health Insurance Program Reauthorization Act was approved in the House and signed by President Obama on February 4, 2009. This Act expands the State Children’s Health Insurance Program (SCHIP) and addresses special enrollment periods, premium assistance programs and notice and disclosure requirements. [February 11, 2009] On December 28, 2008, China’s main law-making body, the National People’s Congress, published a draft law that would introduce a national social insurance fund for all Chinese citizens. This law articulates a common right for all citizens to insurance for pensions, medical care, work injuries, unemployment and childbirth. [February 10, 2009] On January 19, the U.K. government launched its second rescue plan to insure banks against further losses. This plan offers guarantees on banking debt and increases government purchases of high-quality securities. [January 31, 2009] The investment options for Pension Fund Administrators have been modified to allow them to manage investment volatility and risk levels more efficiently. Pension funds now have 90 days to update their investment policies. [January 31, 2009] On January 29, 2009, the Lilly Ledbetter Fair Pay Act was signed into law by President Barack Obama. The Act, the first President Obama has signed into law in his presidency, effectively eliminates the statute of limitations for most claims of workplace pay discrimination. [January 30, 2009] Health Savings Accounts and Health Reimbursement Accounts have been introduced in Puerto Rico effective January 1, 2009. HSAs are tax-free accounts that employees can pay medical expenses out of; HRAs allow employers to make tax-deductible reimbursements to employees for health care costs that have already been paid for. [January 30, 2009] A revision to the Labor Standards Law that would allow employees to receive retirement payments if they choose to retire at the age of 60 has been proposed and passed its first review on January 7, 2009. An increase of the mandatory retirement age to 65 has already been approved, and if passed, this will be the latest of several exceptions to that rule. [January 30, 2009] Subsidies could be provided to all companies that hire new full-time workers, or offer their current part-time workers new full-time positions, as a part of a general program designed to boost the economy and the labor market. [January 29, 2009] U.S. employers will be required to contribute more than USD 108 billion into their defined benefit plans this year. While this is less than the USD 125 billion they would have had to contribute without the Worker, Retiree and Employer Recovery Act, passed in December 2008, it is still a significant jump from 2008 (USD 38 billion) and 2007 (USD 49 billion). [January 29, 2009] From January 1, 2010, the maximum mandatory retirement age will rise from 65 to 70 in France. Among other reasons for this change, the government is hoping that it will help alleviate some of the costs of a rapidly aging population. [January 29, 2009] At the end of January, negotiations began between employees and employers on the future of France’s complementary state pension regimes, ARRCO and AGIRC. These negotiations include maintaining access to a pension from these plans with no penalties attached at age 60. [January 29, 2009] The government has introduced into Parliament a Fair Work Bill that aims to provide a framework for good workplace relations and guarantees a set of minimum terms and conditions of work. Additionally, the Bill seeks to creates a new agency, Fair Work Australia, whose role will include overseeing the collective bargaining process, approving enterprise agreements, adjusting minimum wages and handling unfair dismissal claims and workplace disputes. [January 27, 2009] Employer contributions for supplemental employee benefits have been raised starting January 1, 2009. These new contributions are part of a law that was approved on July 1, 2007, but the implementation of which was delayed until 2009. [January 27, 2009] The option to invest in multiple funds for members of private pension funds has been approved by the Pensions Superintendent. The aim of introducing these new options, which became effective on December 1, 2008, is to provide a more flexible investment environment and prevent the unnecessary loss of money through transfers between accounts. [January 27, 2009] Minimum required employee contributions have been halved in one of many amendments made to the 2006 KiwiSaver Act. Changes to KiwiSaver, the voluntary government initiative that encourages saving for retirement, will take effect from April 1, 2009. [January 27, 2009] An amendment to the 2000 Employment Relations Act will give employers the option of instituting a trial period for new hires in small businesses, subject to a mutual agreement between employers and employees. This new regulation, which will allow employers to fire employees in the first 90 days of their employment without those employees being able to claim a personal grievance case, will take effect from March 1, 2009. [January 27, 2009] A recent survey conducted by Watson Wyatt has found that the number of defined benefit pension plans closing to future accrual is likely to accelerate significantly in 2009. This represents a considerable shift from just a few months prior, and is believed to be a direct result of the current financial upheaval. [January 27, 2009] Global institutional pension fund assets in the 11 largest markets contracted by approximately 19 percent in 2008, from USD 25 trillion to about USD 20 trillion, according to Watson Wyatt's latest Global Pension Assets Study. The fall is in sharp contrast to an average five-year growth rate of 12 percent up to end-2007, and takes assets back to below 2005 levels. [January 27, 2009] Fund managers globally have a generally optimistic outlook for 2009, predicting that markets in most regions will start their recovery this year. According to a recent Watson Wyatt survey, managers further predict that the recovery period of markets will be lengthy and that the influence of pension and sovereign funds will increase while the influence of investment banks and hedge funds will fall significantly. [January 27, 2009] The final report of the Alberta-British Columbia Joint Expert Panel on Pension Standards was published on November 28, 2008. The report makes over 130 recommendations, many of which will require several important legislative and regulatory changes. The importance of finding a balance between protecting due benefits and encouraging the creation and maintenance of pension plans is highlighted throughout. [December 31, 2008] According to a new survey, the number of companies implementing a variety of cost-cutting measures has increased sharply in just two months. Among the changes are moves towards layoffs, hiring and salary freezes and smaller pay raises. [December 31, 2008] Spouses will be able to apply to transfer a lump sum from their total pension claim if their marriage breaks down, according to a proposal by Ontario’s Minister of the Attorney General on November 24, 2008. This proposal will imply a significant shift from the current system, in which division of pension income is deferred until payments start – upon the member’s termination, retirement or death. [December 31, 2008] A recent benchmark study has looked at how Chilean firms are responding to the new APVC (collective voluntary provisional savings) system. A key finding is that there will not be an immediate widespread adoption of APVC plans, but that acceptance will be gradual. [December 31, 2008] In response to changes in life expectancy and long-term return assumptions, the Social Security committee of the Swiss parliament has approved a reduction in the minimum required conversion factor, the ratio that converts retirement savings to an annual pension. [December 30, 2008] A draft regulation to amend unlocking rules and bring the old Life Income Funds (LIF) and Locked-in Retirement Income Funds (LRIF) into line with the new LIF has been proposed by the Ontario Ministry of Finance. If approved, the regulation would allow one withdrawal from LIFs and LRIFs; modify the annual payment from these accounts to match the new LIF regulations; and move the existing Locked-in Retirement Account provisions to a separate, new schedule. [December 30, 2008] Rules governing lump-sum disbursements in Romania’s pension system have been approved. The state pension has also been raised in changes implemented on October 1, 2008. [December 30, 2008] Effective January 1, 2009, mandatory public health insurance and unemployment insurance contributions will change, according to the so-called “Sozialversicherungs-Rechengrößenverordnung 2009”. [December 29, 2008] On December 23, 2008, President Bush signed the Worker, Retiree and Employer Recovery Act of 2008 into law. While the legislation, which Congress passed by unanimous consent, includes measures to provide much-needed relief for pension plan sponsors as well as individual investors, it does not include a number of key proposals the business community was seeking. [December 27, 2008] Regulations to implement and clarify certain provisions of the Labor Contract Law were published and became effective as of September 18, 2008. The new regulations clarify the employment law that prevails when no formal contract is in existence and also provide detail on how severance payments should be calculated. [December 26, 2008] A new law approved on October 19, 2008 reduced the requisite minimum working years for employees to retire in Uruguay. The legislation also introduced special compensation for older retirees, new requirements to obtain disability pensions and special maternity benefits. Most of the changes will take effect in February 2009. [December 26, 2008] Workers are much less willing to pay higher premiums in order to keep their out-of-pocket costs such as deductibles and co-pays lower and more predictable, according to a recent survey. As they take steps to lower their current costs, many of their actions could lead to much higher costs in the future. [December 26, 2008] Proposals announced in the 2008 Pre-Budget Report, released by the U.K. government on November 24, 2008, include increases in employer and employee National Insurance contributions. This increase is part of a move to improve the economic sustainability of public finances in the medium term, and will take effect largely in 2011 when the government expects the economy to be recovering from the current downturn. Also proposed were several measures intended to provide an immediate boost to the national economy, including a reduction in value-added tax. [December 26, 2008] According to recent survey findings, many defined benefit plans in the U.K. expect employer contributions to rise following their next valuation. Also, the financial turmoil and subsequent recession is expected to drive pension plan change generally, including plans closing to new entrants, closing to future accrual for existing members or making other changes to reduce costs. [December 26, 2008] As of January 2009, the earnings ceiling to make pension contributions under the Canada Pension Plan will increase, according to a recent announcement by the Canada Revenue Agency. Contribution rates will remain unchanged. [November 30, 2008] The Swiss minimum guaranteed interest rate that pension funds must provide their active plan members has been cut. [November 30, 2008] Due to the financial crisis, many pension funds in Switzerland are suffering from poor investment performance, resulting in lower coverage ratios. [November 30, 2008] Employers can now contribute to their employees’ accounts, and take advantage of the accompanying tax deduction, according to changes announced in the rules governing contributions to and withdrawals from the Supplementary Retirement Scheme (SRS). Also, SRS members will be able to continue contributing to their accounts after they turn 62, when they can make their first penalty-free withdrawal. The new rules come into effect on October 1, 2008. [November 28, 2008] Reforms to the Russian social security system to include a pension insurance plan have been announced. These changes, which could increase the burden of total payments made by employers, are expected to come into effect from January 2010. [November 28, 2008] Revisions to the Employment Permit System for foreign workers are currently being discussed in Korea. Proposals under discussion are to extend the maximum employment period from the current three years to five years and to increase the minimum wage. If approved, these measures are likely to take effect in 2009. [November 28, 2008] Singapore’s Employment Act has been updated to cover more workers, extend employment standards and benefits and increase fines for employers who do not abide by its regulations. The changes to the Act come into effect on January 1, 2009. [November 28, 2008] Defined contribution pension providers are perceived by sponsors and trustees to be offering better service currently than they historically have, according to recent Watson Wyatt survey findings. Poor service ratings appear to be declining compared with four years ago, although ratings of “good” and “excellent” seem also to be declining for many aspects of service. [November 28, 2008] The Pension Protection Fund (PPF) intends to increase the proportion of its annual levies to be paid by the U.K.’s 100 largest defined benefit pension plans. The amount of the increase will be based on the PPF’s assessment of the long-term risk each plan represents, according to a new proposal published on November 18, 2008. If the proposal is approved, the new levies will come into effect from the 2011/12 levy year. [November 28, 2008] The Securities and Exchange Commission has published a detailed plan that could allow some publicly traded U.S. companies to use international accounting rules for financial reporting as early as the end of 2009, and could lead to all publicly traded U.S. companies using these rules by 2016. [November 28, 2008] In a regulation aimed at tackling money laundering, it has become compulsory for pension funds to register monthly transactions that exceed a certain amount. The regulation was approved on September 2, 2008. [November 28, 2008] There have been substantial cuts in sick leave benefits in the Czech Republic as a result of legislation that aims to discourage abuse of the extensive health insurance provided by the state. Additionally, in provisions that come into effect on January 1, 2009, some of the burden of the benefits payment will shift from the state to the employer. [November 28, 2008] Draft amendments to the Employment Insurance Act could subsidize parental leave for up to six months. The new policy aims to fight discrimination against working women and motivate men to play more of a role in their children’s upbringing. If approved, the new policy is expected to take effect in the first half of 2009. [November 28, 2008] Employer Action Code: Analyze
Latin America/Caribbean - Uruguay: Tax on pensions approved A Social Security Assistance Tax on pensions has been approved by Congress, replacing the income tax imposed on pensions in 2007. It raises the non-taxable minimum pension by 60 percent and is expected to reduce the number of pensioners who pay tax from 21.7 percent to 13 percent of total pensioners. This new tax came into effect on July 1, 2008. [November 28, 2008] The proposal to merge Argentina’s two existing pension systems by nationalizing private pension funds has been passed by the Argentine parliament. The law comes into effect on December 15, 2008. [November 28, 2008] Amendments to the 2007/08 Pensions Bill, regarding changes to the Pensions Regulator’s Contribution Notice (CN) powers, were announced on October 20, 2008. The key amendment will allow the regulator to compel employers to pay into pension plans if decisions have been taken that are materially detrimental to the likelihood of members’ benefits being paid in full, without (as is currently the case) having to prove that this was the intended outcome of those actions. [October 31, 2008] Workers in the U.K. are starting to retire later, according to analysis of data from the Office of National Statistics (ONS). The average age at which men who were economically active at 50 retire from the labor market reached 64.6 years in 2008 – its highest level since the indicator became available in 1984. The equivalent figure for women was 61.9 years. [October 31, 2008] According to a recent survey, a quarter of U.S. employers plan to make layoffs in the next 12 months as the global economic crisis continues to unfold. However, most companies are responding by focusing on increased employee communication and smaller cost-saving measures. [October 31, 2008] Ireland’s Budget 2009, brought back two months to October 14, 2008, focuses on restoring public finances in a time of unprecedented global financial strife. Among key measures implemented is a reduction in the limit on personal contributions to pension products and employer-sponsored pension plans, placing an effective cap on maximum contributions to pension plans. The reductions apply to maximum employee contributions; maximum overall (i.e. combined employer and employee) contributions under occupational pension plans are not affected. [October 31, 2008] In an amendment approved in October 2008, the ceiling on employer contributions to healthcare will be eliminated as of November 1, 2008. Changes in income tax deductions were also approved in September 2008, and will be applicable to the 2008 tax year. [October 31, 2008] Employer Action Code: Analyze
Latin America/Caribbean - Bolivia: Pension law to be reformed A new pension law that could eliminate private pension fund administrators and lower the retirement age is currently being discussed in the Senate. If approved, the law will reform the second pillar of the Bolivian social security system, which was established in 1997. The proposal was sent to the Senate on October 10, 2008 and is expected to be approved by mid-November. [October 31, 2008] The capacity of collective bargaining to negotiate working hours, overtime and paid time off has been broadened, according to a new law approved on August 20, 2008. Decision-making will now be facilitated by a collective labor agreement within companies or organizations, or by a branch agreement within industries. [October 31, 2008] The Argentine government has moved to nationalize its private pension system, making Pay-As-You-Go the only system that will be available to the public for mandatory contributions. A bill was sent to Parliament on October 21, 2008, and is expected to be approved in November 2008. [October 29, 2008] A bill, expected to come into effect in 2009, will make employer discrimination based on race illegal in Hong Kong. The bill will be applicable to all employees, whether they are permanent, part-time or contract workers. Employees under commission-based and outsourcing arrangements are also covered. The bill was passed in July 2008. [October 28, 2008] Effective October 1, 2008, pension funds in Italy will be obliged to provide potential clients with complete information about their plans before entering into signed contracts. The measure, approved by the Commission of Vigilance of Pension Funds (COVIP), aims to improve transparency and engender competition. [October 28, 2008] The implementation of the Tianjin Binhai New District pilot program has raised questions about the prospects of the supplementary pension insurance market in China. It is believed that the concerns of the State Administration of Taxation (SAT) stem from potential tax implications that may arise. Some definitive guidelines from the SAT and the Ministry of Finance can be expected. [October 28, 2008] A sizeable cut in employers’ social insurance tax was approved on August 27, 2008. The new rate will be 15 percent of monthly payroll. This move aims to encourage businesses to officially declare their workers as full-time employees, and eliminate much of the informality that currently characterizes the Albanian job sector. No change has been made with respect to employee contributions. [October 28, 2008] In a law passed in July 2008, the ceiling on social security contributions was removed, and the deduction allowed for pension contributions on the earnings base increased. These changes will come into effect from January 1, 2009. [October 28, 2008] A law regarding paid annual leave that has been in effect since January 1, 2008 has been clarified with new implementation measures. These new measures came into force on September 18, 2008. [October 22, 2008] The pre-tax contribution limit to 1165 (e) Saving Plans in Puerto Rico has been increased by a House Bill that passed on August 7, 2008. [October 21, 2008] On October 14, 2008, the U.S. Department of the Treasury invested USD 250 billion in banks as part of the USD 700 billion bailout, which was approved by Congress and signed into law by President Bush on October 3, 2008. The measure also included an unlimited guarantee on bank deposits for small businesses by the Federal Deposit Insurance Corporation (FDIC) and a guarantee on senior bank debt by the Treasury Department. [October 14, 2008] A survey conducted in July and August 2008 found that many multinational HR functions are continuing to move work offshore in response to perceived global pressures. Many are also avoiding major action in favor of maintaining their status quo. [October 9, 2008] On Oct. 3, 2008, President Bush signed the Emergency Economic Stabilization Act (EESA) of 2008 into law. Backed by USD 700 billion, the act is aimed at stabilizing American financial markets. The new law establishes the Troubled Asset Relief Program (TARP) and limits executive compensation in participating firms. [October 3, 2008] A new study has found that many older workers, and particularly those without employer-sponsored retirement plans or other financial resources, do not expect to receive their full Social Security or Medicare payments after they retire. Confidence is particularly low among those who are younger, female or have a lower level of education, according to a recent survey. [September 30, 2008] Recent survey findings show that the vast majority of defined contribution (DC) pension plans in the UK have inadequate risk assessment and governance policies. However, there are also signs of an increasing focus on the importance of governance for these funds, according to a survey of 108 DC pension plans. [September 29, 2008] A new approach to selecting mortality assumptions to value defined benefit (DB) pension plans was finalized by the Pensions Regulator on September 23, 2008. The new approach will apply to valuations with effective dates from September 22 onwards. [September 29, 2008] Revisions to labor laws in Taiwan taking effect on January 1, 2009, will enable workers to receive a regular monthly pension after retiring. Premiums are expected to double by 2028, resulting in a jump in the effective cost for employers of providing labor insurance. [September 26, 2008] A set of 10 National Employment Standards (NES) has been released by the Australian government that will apply to all employees, regardless of industry, occupation or income level. The standards will come into effect on January 1, 2010. [September 26, 2008] Investment caps have been modified to allow private sector pension funds, gratuity funds and provident funds more freedom in their investment strategies. The new regulations will be effective from April 1, 2009. [September 26, 2008] Effective October 1, 2008, employees hired by outside placement agencies, or manpower companies, who have worked at a company for more than nine months, will automatically become permanent staff of that company under a regulation passed on January 1, 2008. [September 26, 2008] The length of paid maternity leave has increased from 120 days to 180 days, according to a regulation approved by the Brazilian Congress on September 3, 2008. [September 25, 2008] The Russian government will match voluntary contributions made to individual pension accounts, according to new regulations effective from October 1, 2008. The state will also put into place tax incentives for employers and employees, effective from January 1, 2009, in an effort to stimulate voluntary pension savings. [September 25, 2008] The International Organization of Pension Supervisors (IOPS) has recognized the increasing importance of developing better governance practices around defined contribution (DC) pension plans. A new series of papers, drafted by members of IOPS, has drawn on the analysis of a broad range of international DC experiences and policy investigation. [September 23, 2008] A set of new regulations regarding minimum wage, employers’ liability insurance and maternity and adoption leave will come into effect on October 1, 2008. [September 23, 2008] Employers will be under an obligation to grant their employees additional paid leave for significant life events, such as marriage, paternity, mourning and academic sabbaticals, according to a new law approved by Congress on September 2, 2008. [September 23, 2008] Same-sex couples will have access to survivor pensions, both in the Pay-As-You-Go and private capitalization systems, according to a ruling by the National Administration of Social Security (ANSES). The regulation was approved on August 19, 2008. [September 23, 2008] Contributions to the Social Insurance Fund (SIF) will increase, according to new measures proposed by the Ministry of Labor and Social Insurance, although the split between employer, employee and the State will not be affected. These changes will come into effect in January 2009. [September 23, 2008] While Belgian employers believe that their pension plans will deliver the anticipated target levels of income for full-career employees in their retirement, recent survey findings show that they will be disappointed. While some employers recognize this, and know that this lower than expected retirement benefit outcome may force employees to delay retirement, findings also show that most have never reassessed their target benefit replacement ratios. [September 23, 2008] On September 17, 2008, the Federal Reserve (the Fed) agreed to a USD 85 billion bailout of insurance giant American International Group (AIG), to prevent the global ramifications that may have resulted from the fall of one of the world’s largest financial insurance providers. As a result, employers will want to review any pension or other assets invested directly or indirectly with AIG, and understand what the current investment options are for each. This is especially crucial as AIG suffered an immediate downgrade of its credit rating following its bailout by both Standard & Poor’s and Moody’s Investor Services. [September 18, 2008] A new social security and general health insurance law is expected to provide the Turkish population with basic health services. The changes will come into effect on October 1, 2008. [September 15, 2008] A new law recently passed by parliament will progressively increase the retirement age. It will also increase the number of years employees must contribute to a pension before they are eligible to make withdrawals. [August 29, 2008] New legislation will allow Colombia’s contributors to its defined contribution retirement system access to more investment options. The new regulation, which will come into effect in 2010, aims to more accurately align risk profiles with returns and to increase the return on investment received by workers. [August 29, 2008] New proposals introduced in the 2008 Federal Budget to amend the Income Tax Act (ITA) rules for the Medical Expense Tax Credit (METC) will affect employers with Private Health Services Plans (PHSP), especially those that cover over-the-counter drugs (OTCs). The greatest impact is expected to be on PHSPs with Quebec members. [August 29, 2008] Employer Action Code: Act
Asia-Pacific - Korea: Parental leave extended A revision to labor and gender equality law will allow couples to take parental leave for up to two years. This amendment came into effect on June 22, 2008. [August 29, 2008] Employees of qualifying start-up companies will enjoy a 75 percent tax exemption on gains from stock options or share ownership plans under the Equity Remuneration Incentive Scheme (ERIS). ERIS will be available between February 16, 2008 and February 15, 2013. [August 29, 2008] Publicly listed American companies will be required to switch to International Financial Reporting Standards (IFRS) beginning in 2014, if proposals for the conversion of accounting standards in the U.S. are passed. The proposals submitted by the Securities and Exchange Commission (SEC) on August 27, 2008 aim to facilitate transactions and investment comparisons for both investors and companies across international borders. [August 29, 2008] Companies are moving to make their executive pay programs more appealing to shareholders, according to an analysis of proxy statements released earlier this year. Survey findings show that companies are also looking at overhauling portions of their executive benefit plans and severance policies. [August 27, 2008] New regulations passed recently will require employers to revise the amount of benefits they pay their employees. The laws, which modify working time specifications, resignation procedures and phased pension payments, aim to cut bureaucracy and simplify procedures. [August 27, 2008] Congress has updated Medicare to increase quality control and expand the coverage of government health care programs. The expansion is largely financed by cuts to the Medicare Advantage (MA) program, which will affect employers that use MA plans for their retirees. [August 27, 2008] The Pensions Regulator has announced that the introduction of changes to its treatment of longevity assumptions will be delayed until the defined benefit (DB) scheme valuation cycle starting in September 2008. [August 22, 2008] The Australian government has announced significant changes to the previous government’s controversial proposals concerning superannuation arrangements for temporary residents. Employers will still be required to pay superannuation guarantee (SG) contributions for these employees. These changes are expected to be implemented following Royal Assent, in either late November or early December 2008. [August 22, 2008] An agreement signed by government authorities, employers and workers on May 28, 2008, will set up a new system to help workers verify whether employers are complying with their social security obligations. [August 22, 2008] The Pensions Bill will require employers, beginning in 2012, to automatically enroll employees between ages 22 and the state pensionable age into a “qualifying” retirement scheme. The latest round of parliamentary debates on the bill has revealed further details about this new obligation. [July 31, 2008] Superannuation funds could experience cost savings from new regulations that allow them to issue annual reports on their Web sites rather than by printing and mailing. The changes apply to reports for the 2007/2008 calendar years and later, as long as certain conditions are met. [July 31, 2008] Requirements for disclosing companies’ executive compensation policies are expected to change by the end of 2008. If approved, the new regulations would be enforceable starting in the 2009 proxy season and would require substantial changes to how executive compensation is calculated and recorded for many employers. [July 29, 2008] Employers plan to keep pay raises steady next year. Additionally, a full one-third of companies have not made any workforce contingency plans in the event the economy continues to falter, a new study has found. [July 24, 2008] The recently approved pension system reform includes the creation of Collective Voluntary Pension Savings (ahorro provisional voluntario colectivo or APVC), with some characteristics that are very similar to the 401(k) retirement savings system in the United States. The new plan will allow employers to complement the savings of their employees through an external fund administrator. [July 23, 2008] More than 40 percent of U.K. defined benefit (DB) pension schemes are expected to have closed to future accruals within the next five to 10 years, up from the current 6 percent, according to a new survey. The proportion of DB schemes open to entrants is predicted to decrease from 25 percent to 18 percent in the next two years. [July 18, 2008] A bill that requires administrative expenses to be included when pension plan contributions are calculated could force some plan sponsors to pay higher contributions retroactively. The measure would make “technical corrections” to the Pension Protection Act (PPA) of 2006. While it passed the House of Representatives on July 9, 2008, it is still not certain if it will become law. [July 15, 2008] In an effort to reduce high employment costs and cut back on illegal work, a new law approved by the president on May 16, 2008, offers subsidies for registered employment, including easing social security insurance premium payments. [July 3, 2008] The minimum retirement age will increase gradually and some early retirement schemes will be eliminated under recent reforms that will take effect on October 1, 2008. The government’s objective is to ensure the financial sustainability of the social security system. [June 30, 2008] Although rules adopted in the last few years have paved the way to offering pan-European pension schemes, the number of employers implementing such plans is growing at a gradual pace. However, the issue still bears watching for employers, as some developments in the marketplace could speed adoption of such plans. [June 30, 2008] The Legislative Council has made a few key changes to tighten administration of the Mandatory Provident Fund (MPF) scheme, including closing a loophole related to housing allowances that had existed since the MPF’s inception in 2000. The changes, which will take effect on November 1, 2008, include significant penalties for employers who do not follow the new rules. [June 26, 2008] A proposal to create a joint Government-Industry Investment Governance Group (IGG) is likely to move investment governance issues higher up the priority list among institutional investors. This proposal is contained in a consultation document from HM Treasury, the Department for Work and Pensions and the Pensions Regulator, which also proposed certain amendments to the well-established Myners’ principles. [June 26, 2008] Paid maternity and paternity leave periods have been lengthened for parents who adopt children or become foster parents. The changes mean employers may need to update their workplace policies. [June 18, 2008] A set of trial insurance reforms approved recently in the Binhai New District of China’s Tianjin province will provide tax incentives for employers and employees that use supplementary pension insurance products. It is not clear when the trial will begin but some insurance companies have already begun to offer insurance products suitable for the trial. [June 12, 2008] Employers are required to take a greater share of social security contributions from employees’ paychecks. The change comes in response to Congress’ decision to revoke a tax on banking transactions (Contribuição Provisória sobre Movimentação Financeira - CPMF) that many of these employees had paid. [June 10, 2008] A recent court ruling in Peru allows common-law partners the right to receive a survivor pension under the public pay-as-you-go system. [June 10, 2008] Proposed amendments to Quebec’s phased retirement legislation aim to make the plans more attractive to employees. Under the draft legislation, introduced on April 2, 2008, older employees would be able to receive up to 60 percent of their retirement pension while working and continuing to accrue pension benefits. The changes are in line with amendments to federal law approved in December 2007. [June 5, 2008] The number of employers offering workers financial incentives to better manage their health is expected to jump sharply next year, according to a new survey. [June 2, 2008] An April 2008 ruling by the European Court of Justice will require German courts to determine whether a registered same-sex partnership and a marriage should be considered equivalent and, thus, whether surviving partners should be entitled to the same kinds of survivor benefits. The court’s decision may have consequences for occupational and public pension plans both in European Union countries in which same-sex marriage and legal partnerships are recognized and in countries in which they are not. [May 31, 2008] Management of the assets held by the National Pension Fund (NPF) would be outsourced to a group of private investment managers under a recent proposal. The government hopes such a change would lead to better asset management and greater returns for employees and retirees. [May 30, 2008] Rapidly increasing life expectancy probably will drive up the contributions employers need to make to defined benefit (DB) pension plans, according to a study by the Society of Actuaries in Ireland. [May 30, 2008] Most employers in the province of Alberta will experience significant cost savings from government plans to eliminate premium payments for the Alberta Health Care Insurance Plan (AHICP). The elimination will take effect on January 1, 2009. Employers may need to review contractual commitments and collective agreements in light of the change. [May 28, 2008] A new law prohibits health coverage and employment discrimination based on genetic information about plan participants and employees and their family members. The law applies to a wide array of health programs, including retiree medical programs. As a result, employers should determine whether they are collecting genetic information and, if so, how that information is being used. [May 27, 2008] China’s new Labor Contract Law, which took effect on January 1, 2008, tightened requirements for severance payments. Although the law is still new, companies need to be alert to potential financial implications, as a recent Watson Wyatt case study points out. [May 21, 2008] A majority of companies are having trouble attracting and retaining top-performing and critical-skilled employees in Latin America, a recent study reveals. However, companies in the region tend to be more proactive about adopting total rewards and goal-setting programs than their counterparts in other regions. [May 9, 2008] Two public holidays – Martyrs’ Day and Independence Day - only will occur on Mondays, as the result of a new law. [May 8, 2008] On April 25, 2008, the government issued a consultation document on providing the Pensions Regulator (tPR) with powers to pursue companies and individuals whose actions weaken pension schemes, even where this effect is unintentional. The legislation will force companies to undertake more rigorous risk management. [April 30, 2008] More than 85 percent of companies provide additional medical benefits to employees covered by national contractual labor agreements as a retention and attraction tool, a recent survey has found. While employers appear committed to providing private healthcare benefits, most predict the rate of medical cost increases will accelerate in coming years. Many will be looking to review plan design and benefits levels in an effort to control the cost of their plans. [April 30, 2008] Employed and independent workers' minimum taxable income for 2008 tax filings has been raised as of January 1, 2008. [April 30, 2008] As of July 1, 2008, all employers must provide superannuation support of at least 9 percent per employee’s “notional earnings base.” In addition, all superannuation funds must provide a minimum level of death insurance to members who have joined it by default. Although employers have been preparing to meet these requirements for some time, many are taking another look at their plans now that the deadline is drawing near.
[April 30, 2008] The Labor Department recently ruled that a specific but complex global asset pooling arrangement satisfies ownership requirements under the Employee Retirement Income Security Act (ERISA). This ruling potentially removes a significant roadblock multinational companies faced when attempting to combine assets of employee benefit plans maintained all over the world into a single pool. [April 29, 2008] New accounting rules take effect for accounting periods beginning on or after January 1, 2008. The rules for long-term employee benefits liabilities may, on the surface, seem similar to international standards. However, a few differences could force employers to explore whether their accounts will qualify as equivalent under the new rules and could affect the valuation and accounting of their defined benefit pension liabilities. [April 29, 2008] The government recently approved a number of changes to retirement programs that could broaden coverage for workers. Among them is a provision that will allow employers to offer voluntary savings vehicles (ahorro provisional voluntario or APV) on a group basis, with tax advantages for employees. As a result, this new vehicle could offer employers a significant attraction and retention tool. [April 25, 2008] Proposed immigration reforms in Sweden would make it easier for employers to recruit employees from around the world and would automatically give work permits to any foreign worker with a job in Sweden. The measure, which is expected to be enacted, would take effect on December 15, 2008. [April 23, 2008] A new social security system, with components of both traditional defined benefit (DB) pensions and defined contribution (DC) retirement accounts, began operating on January 1, 2008. Employers and employees are paying higher contributions to fund the new system. [April 16, 2008] Employees will be able to transfer funds between pension instruments and providers without suffering tax consequences, under legislation that will be implemented in two steps. The new law will apply to provident and pension funds as of October 1, 2008, and to executive insurance accounts as of January 1, 2009. [April 14, 2008] Employers must withhold more social security contributions from employees’ paychecks according to a presidential decree of February 21, 2008. The decree also sets new maximum and minimum levels for retirement benefits paid by the government. [March 31, 2008] Minimum pensions and salaries are being adjusted based on corrected inflation estimations, the Labor Minister recently announced. [March 31, 2008] The International Accounting Standards Board (IASB) has published a discussion paper that would make a number of changes to the way postretirement benefits are accounted for on financial statements. The Board is now accepting comments on the changes, which could give rise to a higher assessment of liabilities and increased volatility in financial statements. [March 31, 2008] Companies will be required to arrange formal training for pension trustees under new regulations proposed by the Social Welfare and Pensions Bill 2008 and expected to be approved soon. [March 28, 2008] Employers hiring illegal migrant workers from outside the European Union could face strong penalties under new immigration rules that took effect on February 29, 2008. [March 28, 2008] Investment restrictions on pension funds have been loosened, allowing fund administrators to invest up to 40 percent of their assets in local and foreign stock, as well as in private investment funds. [March 27, 2008] Pooling networks have grown in popularity in recent years as multinational companies have realized they can use them for a variety of purposes – negotiating down insurance rates, collecting data and aggregating content to meet disclosure rules. [March 26, 2008] A pilot defined contribution retirement plan scheme for employees of state institutions is being launched in five provinces and municipalities. The plan was approved on February 29, 2008, by the Chinese State Council, and aims to narrow the gap between the benefits retired enterprise workers receive and those received by employees of state institutions. [March 19, 2008] Measures to encourage longer labor force participation and modernize the social security system are now in place. They went into effect on January 1, 2008, one and a half years after the government, trade unions and employer associations reached agreement on the contentious issues. [March 18, 2008] A lower retirement age and a new minimum pension system are being implemented as the result of legislation that passed on January 16, 2008. [March 10, 2008] The minimum wage has increased recently in Bolivia, Brazil, Colombia, Ecuador, El Salvador, Guatemala, Jamaica, Mexico, Nicaragua, Panama and Uruguay. [March 7, 2008] Effective strategies to retain and attract older workers may become increasingly important over the coming years. According to the recent Statistics Canada Labor Force Survey, employment growth among workers age 55 and older was significantly faster than among the prime-age group of workers aged 25 to 54. [March 5, 2008] The federal budget, which was tabled on February 26, 2008, proposes creating Tax-Free Savings Accounts (TFSA) beginning in 2009. Individuals could contribute up to CAD 5,000 in after-tax dollars to these accounts annually. Investment income and withdrawals would be tax-free, and account holders could use the funds however they wish. [February 28, 2008] Recent revisions to the employee benefits accounting standard, AS15 (Revised 2005), will allow employers more time to spread out new liabilities on their balance sheets. [February 27, 2008] Employers may need to review assumptions in their retirement programs in light of a law that will considerably increase the social security charges employers must pay when employee contracts are terminated involuntarily. The law also will outlaw involuntary retirement before age 65 as of January 1, 2010. [February 27, 2008] Recently approved changes to the parental benefit system offer incentives to parents of young children to return to work sooner. The new law offers greater compensation for workers who take a shorter parental leave. [February 25, 2008] Employers face new retirement and healthcare plan contribution rates for executives (dirigenti) under a collective agreement for the commerce/services industry, reached on January 23, 2008. [February 21, 2008] The unemployment contribution rate for employers and employees has been reduced, and the maximum period to receive unemployment benefits has been extended, under a law that took effect on January 1, 2008. [February 21, 2008] The main vehicles employers in Spain use to fund company pensions will see considerable change under a law enacted on December 14, 2007. One of the key components of the new law will be to open greater investment options for plan participants. [February 20, 2008] A consultation document the Pensions Regulator issued on February 18, 2008, would encourage trustees and scheme sponsors to increase the assumed longevity of plan participants. If adopted, this could significantly increase the funding targets for defined benefit schemes and require employers to pay in extra contributions. [February 20, 2008] The Association of British Insurers (ABI) and the National Association of Pension Funds (NAPF) have released guidelines to help publicly listed companies set policies regarding executive compensation [February 20, 2008] A new mandatory holiday, Family Day, which will take place the third Monday of every February, has been introduced in Ontario. The first Family Day was February 18, 2008. [February 19, 2008] A San Francisco ordinance that requires employers to spend specified amounts on health care for their employees recently took effect for large employers. However, the mandate remains the subject of litigation and could be overturned by upcoming court action. [February 19, 2008] New regulations will change the maximum allowed contribution for the Canada Pension Plan (CPP) in 2008. [February 19, 2008] In an effort to reduce financial risks for pensions, the government is creating a guarantee fund to support the public pensions regime. It is also shifting requirements for how pension funds invest in some foreign securities. [February 13, 2008] Medical cost increases for employers throughout the world are expected to accelerate over the next five years, eclipsing the rate of inflation in most countries, according to a new poll. The findings are significant for employers as health care is fast becoming the most desired employee benefit worldwide, even in countries with state-sponsored medical programs. [February 7, 2008] The government has revised the way its wealth tax is calculated, subjecting a greater amount of individual net worth to the tax. [February 6, 2008] The increased likelihood of “trapped” surplus in pension schemes is among a number of factors moving pension risk management higher on the corporate agenda in the United Kingdom. [February 4, 2008] Global institutional pension fund assets in the 11 major markets grew by about 9 percent during 2007 to more than USD 25 trillion, a new study shows, but many pension funds have lost ground since January 1, 2008. The recent turn in the markets has highlighted the benefits, for trustees and plan sponsors, of using a wider range of asset classes. [January 30, 2008] A new U.S. law more than doubles the amount of leave employees may take when a family member is injured in the line of military duty. The law also allows shorter leave periods for employees whose family members are called to active duty. The law took effect on January 28, 2008, and employers can expect to see requests soon. [January 30, 2008] Special pension regimes for two state-owned transportation firms – SNCF and RATP – will be reformed significantly as of July 1, 2008. Changes to these pensions are part of a larger pension reform. [January 28, 2008] New regulations set the days of paid annual leave employees are entitled to, effective January 1, 2008. Many companies are currently reviewing their existing annual leave policies to fully comply with the new rules. [January 28, 2008] The minimum age to request early retirement (seniority pensions) will increase from 57 to 61 years old by 2013 for almost all Italian workers, under a controversial reform that took effect on January 1, 2008. The reform, approved as part of the 2008 budget process, will soften retirement age changes approved by the previous government in 2004. [January 25, 2008] The Internal Revenue Service has proposed new regulations for hybrid retirement plans, clarifying many issues that employers had about the plans. However, a number of issues, including some vesting and transitional standards, remain unresolved. [January 25, 2008] Pension plans now have the option of using letters of credit (LOCs) to avoid funding solvency deficiencies in the province of Alberta. Employers will have to consider both the advantages and disadvantages of this new instrument, including cost and plan member and union perceptions. [January 21, 2008] Quebec employers will be required to grant unpaid leave to workers who have suffered specific tragedies, such as the murder or suicide of a spouse or child, under regulations that came into force on December 18, 2007. [January 17, 2008] With legislative changes scheduled to take effect on July 1, 2008, Australian employers have just a few months to review their retirement arrangements to ensure the level of superannuation they provide continues to meet the mandatory Superannuation Guarantee (SG) minimum. [January 16, 2008] The Bolivian government has approved a plan to create a new “Dignity Pension” to replace to the old solidarity bonus (Bonosol) the state provides to retired workers. The action is expected to improve retirement security in the country. [January 16, 2008] Recent legislation in the United Kingdom and a change in pension scheme trustees’ focus and attitude are giving pension trustees new roles in mergers and acquisitions. As a result, pensions have the potential to break – and in some cases, even make – transactions. [January 16, 2008] The Employees Provident Fund (EPF) announced it expects to receive more than 40,000 applications per month for the housing loan monthly installment withdrawal program that began on January 1, 2008. The program is part of the broader “Beyond Savings” initiative which is being introduced in stages from November 2007 through June 2008 and aims to enhance the retirement savings of EPF members.
[January 10, 2008] According to the Budget Law 2008, employers and employees face new paperwork requirements, as part of the government’s effort to make sure workers are hired on a regular employment agreement. [January 10, 2008] Pension schemes likely will have to pay increased general and Pension Protection Fund (PPF) levies in the United Kingdom, effective April 1, 2008. [December 31, 2007] Beginning on July 1, 2008, the government will collect superannuation contributions for temporary residents and hold the proceeds in accounts on behalf of those workers. The policy change sparked questions about whether temporary residents will be eligible for superannuation-related insurance policies in the future. [December 31, 2007] On December 30, 2007, the government ratified a collective agreement that will ensure pension benefits for many employees who do not now have pension coverage. Employers and employees will contribute to the new program, which takes effect on January 1, 2008. [December 31, 2007] Yet another phase in the United Kingdom’s seemingly continuous program of pension reform was introduced in Parliament on December 5, 2007. Among other efforts to improve retirement security, the Pensions Bill would create new personal retirement accounts and require employers to enroll workers automatically in retirement plans. [December 28, 2007] A new law affords greater protection to employees who alert authorities to fraud, bribery or other forms of corruption in their company. [December 18, 2007] Workers who choose to phase in their retirement will be eligible to receive pension payments and continue to accrue benefits under broader budget legislation approved by the Canadian government on December 14, 2007. The new law, effective immediately, could provide a valuable financial tool to help employers compete in a tight labor market and retain skilled workers. [December 18, 2007] New rules the government’s pensions regulator has issued will relax some requirements for receiving an old-age, disability or survivor pension from the Costa Rican social security scheme. These changes will be financed in part by social security contribution increases for employers and employees. [December 13, 2007] EU member states were again unable to reach consensus on a directive that would protect pension benefits accrued under supplementary schemes and, in so doing, encourage job mobility within Europe. The directive was discussed at the European Council meeting on December 5 and 6, 2007, but despite compromises to its text, delegates failed to give it the unanimous support it would need to become law. [December 10, 2007] A number of regulatory changes made in late 2007 are prompting trustees to take another look at their retirement plans, including a new rule that allows terminally ill employees to receive lump sum payments from their superannuation accounts tax free. [December 6, 2007] According to an October 2007 ruling by the European Court of Justice (ECJ), mandatory retirement ages can be permissible, despite appearing to be discriminatory on the grounds of age. The ruling has added some confusion to the European marketplace, where it had been thought that such rules might have to be repealed. [December 5, 2007] Guidance the Internal Revenue Service (IRS) issued in late 2007 is forcing traditional pension plan sponsors to review their plan provisions and participant communication strategies regarding lump sum distributions and benefit restrictions. [December 4, 2007] Watson Wyatt has announced that it will form a strategic alliance with Fifth Quadrant, the independent South African actuarial and employee benefits consultancy. [December 3, 2007] Succeeding in the Chinese market is of the highest strategic importance for most German multinationals, but human resources issues present the greatest challenge to conducting business there, a new survey finds. [November 30, 2007] Bulgaria’s ruling coalition has increased pension payouts and agreed to simplify the income tax code. In addition, changes to social security contributions are pending. [November 29, 2007] The Australia Labor Party, which won a majority in Parliament in the November 24, 2007, election, is unlikely to make significant changes to the country’s retirement programs. [November 29, 2007] The gap between the buying power of senior managers and that of junior staff is widest in Latin American countries and most narrow in Western Europe. [November 26, 2007] The new Welfare Reform Act will prompt the majority of employers in the United Kingdom to review the disability benefits they offer to employees, according to a new survey. [November 22, 2007] A new national Employment Promotion Law that will take effect on January 1, 2008, intends to prohibit job discrimination. [November 21, 2007] In an effort to ensure more workers have pensions, the Histadrut labor federation and the Manufacturers Association of Israel have signed an agreement that would ensure pension benefits for many employees who do not now have pension coverage. The agreement, which was reached on July 19, 2007, is pending approval by the Israeli parliament, the Knesset. [November 21, 2007] A recent survey finds that employee satisfaction is high with respect to employer-provided medical benefits, which are an important attraction and retention tool in Brazil. [November 19, 2007] A ruling from the European Court of Justice (in the Amurta case) may have inched European pension plans closer to being able to receive dividends from other European companies without the application of withholding taxes. [November 15, 2007] Noncash payments to foreign employees now constitute salary expenses and, as a result, are deductible from income taxes, according to a directive issued by the Russian Finance Ministry. [November 15, 2007] Watson Wyatt Worldwide has announced that it will open an office in Dubai in partnership with the Knowledge and Human Development Authority (KHDA). [November 13, 2007] Employers would have to offer re-employment to employees beyond the retirement age of 62 under a proposed law that will take effect in 2012 if approved by Singapore’s parliament. [November 13, 2007] Chile’s president has recently approved creating a new holiday in mid-September, ensuring workers will have three days off to celebrate Independence Day and Army Day. The new law, which went into effect on September 14, 2007, also declares May 1, September 18 and December 25 as compulsory legal holidays that most workers cannot waive. [November 12, 2007] New regulations to improve health and safety conditions in the workplace took effect on November 1, 2007. The regulations set out specific guidelines on a host of issues. [November 8, 2007] With continuing pressure to control health care costs, more companies plan to offer financial incentives to reward workers who adopt healthy lifestyles, according to a new survey. [November 8, 2007] Switching pension plans is now prohibited for all contributors who are within 10 years of retirement, according to a recent ruling by the Colombian Constitutional Court. [November 6, 2007] A new national annuity system that aims to improve retirement security was approved by the Legislative Yuan on July 20, 2007, and took effect on October 1, 2008. [November 2, 2007] The European Commission is trying again to secure agreement on a directive that would protect pension benefits accrued under supplementary schemes and attempt to encourage job mobility within Europe. [October 30, 2007] Some 45 percent of U.K. employers with defined contribution (DC) pension schemes are considering making changes to their retirement arrangements. [October 29, 2007] Despite recent volatility in capital markets, pension funded ratios have reached their highest levels in more than five years in Canada. This may offer some comfort to plan sponsors as the key budget planning date of December 31 approaches. [October 23, 2007] A large majority of companies around the world are struggling to attract and retain top-performing and critical-skill workers. In addition, many employers do not fully understand why workers join or leave an organization, an obstacle that greatly increases the challenge of finding and keeping good employees. [October 22, 2007] A proposal approved by the Executive Yuan on September 19, 2007, would strengthen employee negotiation rights during mass layoffs and prevent employers from malpractice when terminating employee contracts. [October 16, 2007] The pre-budget report the government published on October 9, 2007, includes proposed changes to tax law, including increasing the amount of assets that spouses and civil partners can inherit tax-free under certain conditions and significantly simplifying the capital gains tax regime. The proposals would also amend the tax treatment of individuals who are resident but not domiciled in the United Kingdom. [October 16, 2007] The Argentinean government has revoked a law that forced employers to give an extra 50 percent severance payment to workers fired without a justified reason. The change took effect on September 19, 2007. [October 11, 2007] The government is taking a number of steps to implement new pension systems created in recent years to lessen retirees’ reliance on social security. However, a delay in implementing second-pillar pensions has raised questions about whether that system will be fully operational by January 1, 2008, as originally planned. [October 11, 2007] The amount of statutory annual leave will be extended from 4 weeks to 5.6 weeks per year, under regulations that began to take effect in October 2007. The main beneficiaries will be the estimated 22 percent of employees who have received less than 5.6 weeks of paid holiday. [October 11, 2007] Due to a tax cut the Argentinean Parliament passed on August 22, 2007, companies will have to adjust the level of income taxes they have withheld for employees this year. The law is retroactive to January 1, 2007. [October 10, 2007] A bill that is likely to be voted on before the end of the year would make more changes to France’s laws on forced retirement. The issue has been the subject of many legislative efforts in recent years, as the government has attempted to reduce the number of forced retirements. [October 10, 2007] Under a new law that is expected to receive legislative approval soon, employers and unions would be subject to fines if they refuse to take part in collective bargaining. [October 8, 2007] Most big enterprises in the Philippines are providing incentives for employee performance, according to a survey by the Department of Labor and Employment. [September 27, 2007] A new law on work, employment and purchasing power will require general managers to meet performance targets before receiving "golden parachute" payments effective immediately and will exempt extra working hours from taxes, effective October 1, 2007. [September 26, 2007] De Nederlandsche Bank has announced that it will not apply penalties for failing to comply with the new pension fund governance rules until January 1, 2008, when inspections are due to start. The new Pension Act took effect on January 1, 2007. [September 25, 2007] Uruguay’s tax system has been significantly revised. Among the changes are the introduction of the first income tax in nearly four decades and the elimination of 15 other taxes. [September 25, 2007] The retirement age may increase from 57 to 58 in 2008 and then gradually up to 61 in 2013, under an agreement the government reached with unions on July 20, 2007. This controversial provision of pension reform faces a difficult road in the Parliament. [September 25, 2007] Merit pay increases for employees in Asia-Pacific and Latin America are expected to continue to top those of U.S. and European workers in 2008. [September 25, 2007] The government can shut down operations of some employers who disregard health and safety rules under a new law that came into effect on August 25, 2007. The law also puts in place a process to strengthen many existing health and safety regulations and expand the regulations to all sectors and workers. [September 25, 2007] Government-financed pensions for retirees from private and state-owned enterprises have increased and are expected to grow further under a policy announced by the Ministry of Labor and Social Security. [September 24, 2007] Legislation that would require employer-sponsored health plans to treat mental health benefits similarly to medical and surgical benefits advanced in Congress the week of September 17, 2007. The bill appears likely to become law. [September 24, 2007] Private companies in Bolivia must register information on salary increases under requirements effective July 27, 2007. [September 19, 2007] Employees now have the right to claim moral damages against employers if they believe they have been victims of undue stress, disrespectful treatment or actions that caused the discredit of their public image. [September 18, 2007] Total assets at the world’s largest 300 pension funds grew by around 12 percent, to USD 10.4 trillion, during 2006. For the second year in a row, the funds grew by USD 1 trillion, according to a new study. [September 10, 2007] Regulations governing working hours and other workforce requirements have been revised. [September 5, 2007] Average wages over a 12-month period – instead of a one-month period – will now be used to calculate relevant statutory entitlements, after the Employment Amendment Ordinance went into effect on July 13, 2007. As a result, employers must extend the period to keep wage and employment records from six months to 12 months. This requirement will take effect on January 13, 2008. [August 31, 2007] In its first public meeting on the second phase of its review of accounting rules for postretirement benefits, the Financial Accounting Standards Board (FASB) outlined three areas of focus. The most significant will be new rules for how plan sponsors determine postretirement benefit costs and classify these costs on their income statement. [August 31, 2007] The European Court of Justice has ruled that certain Belgian taxation provisions for pensions infringed EU Treaty Freedoms. The findings are expected to be helpful in developing pensions' case law relating to transfers and the requirement for a locally-based administrator/tax representative. [August 30, 2007] The Isle of Man government is expected to publish details of the new tax regime for pensions this autumn. The changes, which will be included in a Pensions Bill, are likely to be effective from April 6, 2008. This follows its response to the consultation on a simplified tax regime, published in March 2007. [August 30, 2007] The Canadian Accounting Standards Board’s July 31, 2007, decision not to change accounting treatment for defined benefit (DB) plans at this time gives plan sponsors at least a three-year reprieve from dramatic changes to their balance sheets, debt covenants and other contractual arrangements. [August 30, 2007] A stricter regime will come into effect in September 2007 that will allow the government to impose on-the-spot fines on employers that commit even minor breaches of Pensions’ Act requirements. [August 29, 2007] Many large multinational companies in China are still examining their options for providing supplementary retirement plans and are awaiting more clarification on how regulations and tax laws will apply to enterprise annuities (EA), a recent study has found. [August 29, 2007] Colombia and Chile have signed a social security agreement that allows individuals who work in either country to receive pension and social security benefits. [August 27, 2007] Chile’s Central Bank recently decided to allow Pension Fund Managers (AFP) to allocate more funds to foreign investments. The limit on foreign investments will gradually increase from 30 percent to 45 percent. [August 22, 2007] As of July 1, 2007, employers are required to contribute 14.5 percent of employees’ salaries to the Central Provident Fund (CPF), up from 13 percent. [August 21, 2007] The Internal Revenue Service (IRS) recently released final regulations on phased retirement that restrict a plan’s normal retirement age to an industry-based typical retirement age or to age 62, whichever is earlier. The regulations also restrict in-service distributions from retirement plans. [August 20, 2007] On August 8, 2007, the German government approved a proposal to extend the social tax exemption workers receive for contributions to occupational pension plans. The exemption has been set to expire on December 31, 2008. The draft law must still be approved by the German parliament. [August 16, 2007] The minimum wage in Chile has increased and could potentially rise again if the nation meets predetermined levels of overall economic growth. [August 14, 2007] On August 6, 2007, the IRS issued proposed cafeteria plan regulations that would have a significant impact on employers. When finalized, the rules would generally apply for plan years beginning on or after January 1, 2009. [August 7, 2007] The European Court of Justice ruled on June 28, 2007, that the management expenses of investment trust funds are exempt from Value Added Tax (VAT). Although the Court did not address whether the exemption would extend to the management of other forms of pooled investments, including pension funds, the European Commission has indicated its support for such an exemption. [August 6, 2007] Controversial changes to the Labor Code, which go into effect on September 1, 2007, aim to strengthen the position of employees and trade unions. Employer associations in Slovakia say companies’ costs will rise as a result. [August 3, 2007] Changes to the Employees Provident Fund (EPF) Act, in particular reducing the compulsory employer contribution for employees age 55 and above, are designed to encourage employers to hire older people. [August 2, 2007] Under final regulations recently issued by the U.S. Treasury Department and the Internal Revenue Service, nonqualified deferred compensation (NQDC) plans will be subject to stricter rules regarding the form and time of distributions, and the timing of employee elections. [August 1, 2007] The rate of pension plan freezes among FORTUNE 1000 firms has slowed, and the majority of companies with defined benefit plans are committed to keeping them, two new studies indicate. [July 24, 2007] A bill that aims to prevent employers from evading Mandatory Provident Fund (MPF) contributions was introduced in the Hong Kong Legislative Council on June 27, 2007. It is expected to pass the parliament this legislative session. [July 20, 2007] With the deadline for employees to select an authorized pension fund in which to invest their TFR (Trattamento a Fine Rapporto) indemnity future allocations now passed, employers are awaiting the results. [July 19, 2007] The minimum wage in Argentina is being raised in three stages, up to ARS 980 (USD 315), beginning on August 1, 2007. [July 19, 2007] On July 1, 2007, Taiwan’s minimum wage, which had remained unchanged for the past 10 years, increased by 9.09 percent. [July 18, 2007] As the number of elderly people reaches unprecedented proportions worldwide, countries will have to adjust their pension and health care systems to ensure long-term viability, according to a recent United Nations report. [July 18, 2007] Germany’s recently passed health care reform is being implemented, but it remains unclear if increased payroll contributions will be required to finance the plan. Mandatory employer and employee rates will not be determined until the end of 2008. [July 17, 2007] On June 29, 2007, the standing committee of the National People’s Congress passed the landmark Labor Contract Law. This new law has been a subject of long and intense debate since the first draft was unveiled in 2006. It is expected to have a significant impact on employers when it comes into effect on January 1, 2008. [July 16, 2007] The International Accounting Standards Board has approved a new interpretation of International Accounting Standards 19 (IAS19) that clarifies the asset ceilings for defined benefit pension schemes. The interpretation, which was issued on July 5, 2007, may remove doubts regarding the allowance of refunds for some pension plans and make other companies more hesitant to commit to a future payment schedule. [July 13, 2007] Employers in Mexico are contending with new limits on deducting retirement plan contributions from income taxes and other changes to regulations affecting complementary retirement plans. The changes are due to income tax law amendments that went into effect in December 2006. [July 13, 2007] Many U.S. employees don’t understand how their health care coverage works and admit their familiarity with the most basic health care vocabulary needs improvement, a new survey has found. As a result, employers may benefit from efforts to improve employee health care literacy. [July 10, 2007] Pension funded ratios have reached their highest levels in five years as conditions for Canadian pension plans steadily improve, according to a recent analysis. [July 10, 2007] Implementation of a new universal health care system has been postponed until September 1, 2007, to give the government more time to educate the public. The system will be financed by employer and employee contributions. [July 9, 2007] A recent survey has found heightened interest in pensions among companies in Italy, particularly among medium-sized multinationals. Eight out of 10 companies say that company pension provision is central to their employee benefit and reward policy. [July 5, 2007] A directive to make it easier for workers to transfer pensions within and between European Union states appears unlikely to become law in the near future. The Employment and Social Affairs Council (EPSCO) of the European Commission was unable to reach a compromise that would satisfy the concerns of all member states. [July 2, 2007] The Swiss government has removed quotas on workers from the 15 original EU countries, the recently incorporated Malta and Cyprus, and the EFTA countries of Iceland, Norway and Liechtenstein. The change is expected to increase the supply of labor, especially skilled workers, in Switzerland. [July 2, 2007] The minimum wage in Russia was raised to RUB 1,400 (USD 54) on May 1, 2007, and will be increased again to RUB 2,300 (USD 88.80) on September 1, 2007. Additionally, regional governments are now allowed to set their own minimum wage, by agreement with local employers and trade unions, although the figure can not be lower than the federal threshold. [June 30, 2007] After intense debate, the German government has implemented an increase in the retirement age and accompanying subsidies for companies that hire older workers. [June 29, 2007] Changes to the Social Security system that went into effect on June 1, 2007, will alter the way benefits are calculated and otherwise attempt to ensure the system’s sustainability as the number of retirees grows. The changes will have the greatest affect on higher-earning employees and those with above-average salary increases. Employers may want to communicate with employees on the changes and consider the impact on their own retirement programs. [June 29, 2007] In a surprise move, the government has announced plans to require employers to contribute to the KiwiSaver accounts that their employees open. This requirement, made public in 2007 budget proposals released the week of May 14, 2007, would reverse earlier plans to allow voluntary employer contributions to the savings program. [June 28, 2007] The government has released more detail on the Personal Accounts savings plans, into which eligible employees will be enrolled automatically beginning in 2012. The government hopes that this information will allow employers to begin to prepare. [June 28, 2007] As of July 1, 2007, employers in Beijing, Guangzhou and Shanghai must adjust their statutory contributions to the government housing fund to reflect recent regulatory changes. Because these changes were just announced, many employers have a limited time to conduct a full study and are adopting interim solutions, such as offering employees a temporary housing cash allowance, and postponing final decisions. [June 28, 2007] As a result of a recent Ontario Court of Appeal’s decision, employers may have more flexibility to use defined benefit (DB) surpluses to make contributions to defined contribution (DC) components of their pension plans. [June 27, 2007] Many multinational companies are reexamining global investment policies and risk management strategies related to their retirement plans, a new study has found. In addition, many firms find governance of global pension systems to be a challenge given the differences in regulations around the world. [June 26, 2007] Two provinces – Manitoba and Newfoundland/Labrador -- are implementing new legislation to protect retirement savings from enforcement processes. [June 25, 2007] Under a new law, pension fund managers can invest in stocks, bonds and derivatives. Until now, such funds could only be invested in bank deposits because there was no supervisory body to monitor the investments. [June 20, 2007] Employers, employees and retires will soon be paying new government contributions as part of an effort to fund a non-profit health care plan for all legal citizens. The law establishing the new system was approved on December 20, 2006. However, it has not yet become effective due to recent changes in government administration. [June 19, 2007] All workers in Peru who currently participate in the private defined contribution system will be able to return to the public pay-as-you-go pension system, according to a new law that went into effect on March 28, 2007. [June 13, 2007] Rising health care benefit costs are causing considerable angst among U.S. workers, and many are taking steps to improve their health. [June 6, 2007] The Brazilian National Monetary Council is allowing pension funds to invest their assets in a broader range of categories, according to a new regulation approved on May 30, 2007. [June 6, 2007] New portability and vesting regulations for closed complementary pension plans are being implemented through August 2007, requiring plans to adjust their provisions or face fines for noncompliance. The new rules – resolution CGPC No. 19 and statement SPC No. 15 - were finalized in January 2007. [June 5, 2007] A measure President Bush signed into law on May 25, 2007, to fund the Iraq war included provisions to raise the minimum wage for the first time in 10 years and make technical corrections to the Pension Protection Act (PPA) of 2006. [May 31, 2007] Three years after the so-called Fillon Law offered employers and employees more ways to save for retirement, the number of employer-based savings plans known as PERCOs continues to grow. Companies have been slower, however, to convert their defined contribution plans into the PERE individual retirement accounts the law also authorized. [May 30, 2007] Budgets proposed recently by the federal government and the provincial governments of Quebec and Alberta would make a number of changes to retirement programs. All three budgets are awaiting legislative approval but are expected to be enacted. [May 29, 2007] Turmoil in the private health insurance market has subsided since the Quinn Group, an Irish-based conglomerate, officially took over BUPA Ireland and launched Quinn Healthcare on April 17, 2007. At present, the plans Quinn Healthcare is offering are exactly the same plans and policies as those BUPA Ireland had offered but it is unclear if that will remain the case going forward. [May 23, 2007] The pension reform bill which Congress passed in February 2007 is undoing some of the privatization efforts of the 1990s and prompting employers and employees to consider new retirement program options. [May 22, 2007] As of July 1, 2007, employers will no longer face a limit on the superannuation contributions they can deduct from income taxes. Instead, individuals will pay higher tax on excess concessional contributions. [May 17, 2007] A landmark labor rights law that would place more emphasis on employee protection and strengthen the hand of unions is now on the national legislature’s docket, having been tabled for a third reading later in 2007. If passed by the National People’s Congress (NPC), it would be the country’s first specific law governing labor contracts and would have a significant impact on employers. [May 16, 2007] Belarus and Russia have reached an agreement that guarantees equal social security rights for citizens of both countries that migrate between the two nations. [May 14, 2007] The effect of last year’s pension reform law on large companies’ sponsorship of defined benefit plans remains unclear. [May 11, 2007] Rising long-term interest rates have pushed discount rates higher in much of the world, easing pension fund liabilities. [May 8, 2007] Some pension schemes will pay five times as much in Pension Protection Fund (PPF) levies in the coming year as they did last year. On April 30, 2007, the PPF Board announced its decision on the factors to be used in calculating levies for the coming year, leading to the increase. [May 8, 2007] The law simplifying superannuation taxes, which will begin to take effect on July 1, 2007, is creating a number of anomalies in the way that death and disability benefits are treated. [May 3, 2007] Despite double-digit salary increases and a growing focus on incentive pay, employers in India are faced with high attrition rates. In addition, a number of employers say they have trouble attracting employees with the right skills. [May 1, 2007] The governments of Peru and Spain signed a Social Security agreement on April 18, 2007, that is intended to allow Peruvian employees who live in Spain and Spanish workers living in Peru to gain access to Social Security benefits when working in the other country. [May 1, 2007] The number of companies switching from the traditional severance system to retirement plans has increased over the last five months, and total retirement plan assets now stand at KRW 812 billion (USD 876 million). [April 26, 2007] A prohibition against government-paid maternity leave for single mothers was lifted on January 22, 2007, when the state minister for Community Development, Youth and Sports announced the changes. [April 23, 2007] In an effort to stem the erosion of retirement funds, the board of Central Provident Fund (CPF) has introduced new caps on sales charges and expense ratios with effective dates of July 1, 2007, and January 1, 2008, respectively. All private funds eligible for CPF investments must comply with the new norms or risk the cancellation of their license. [April 12, 2007] Chief executive officers at the largest U.S. companies saw their annual bonuses increase 13 percent and the value of their equity-based compensation holdings grow nearly 50 percent last year. [April 10, 2007] Employers are no longer automatically entitled to corporate tax relief for contributions to a registered pension scheme. According to new guidance issued by Her Majesty’s Revenue and Customs (HMRC), tax relief will be allowed only if it can be demonstrated that the contributions have been incurred “wholly and exclusively” for the purposes of the business. The requirements apply to accounting periods ending on or after April 6, 2006. [April 10, 2007] Employers will no longer be able to require temporary workers to work extra hours without their consent and will have to offer such workers regular contracts after two years of service under a new law that will begin to take effect in July 2007. The National Assembly approved the bill on November 30, 2006. [April 5, 2007] The province of Quebec is implementing a new law that will allow limited use of private health care as part of an effort to improve health and social services. The law (Bill 33) is seen as a potential harbinger of change for the province’s and possibly the country’s public health care system. [April 4, 2007] The KiwiSaver Act retirement scheme will be implemented as of July 1, 2007. It is a voluntary workplace-based government initiative that is designed to help employees save for retirement and to complement New Zealand’s existing tax-funded age pension. [April 3, 2007] Pooling networks have grown in popularity in recent years as multinational companies have realized they can use them for a variety of purposes – negotiating down insurance rates, collecting data and aggregating content to meet disclosure rules. [April 2, 2007] Some personal and corporate income tax rates will decrease as of April 2008, Chancellor of the Exchequer Gordon Brown announced in his budget of March 21, 2007. However, the personal tax cuts will be offset to some extent by other changes. [April 2, 2007] The Department of Labor has revised the minimum wage for employees in New Zealand effective April 1, 2007. [March 30, 2007] The Ministry of Health and Welfare raised the health insurance premium by 6.5 percent, effective January 2007. As a result, private and public employees who subscribe to corporation-based employee insurance must pay an additional 37,000 KRW (USD 40) per month, and self-employed and unemployed individuals who subscribe to region-based self insurance schemes must pay 32,000 KRW (USD 35.72) a month more. [March 29, 2007] With the labor market tightening, the Workforce Development Authority (WDA) has discontinued a two-year-old program that helped the unemployed search for, adjust to and stay in new jobs. The discontinuation of the Re-Employment Support Scheme (RESS) was effective January 1, 2007. [March 26, 2007] Singapore’s Ministry of Manpower has mandated a new type of work permit for foreign workers called the “personalized employment pass” or PEP. Since January 1, 2007, PEP has been granted to those workers who have graduated from local institutions and have worked in Singapore for several years. [March 26, 2007] A new resolution requires pension funds to make more information on their financial status publicly available. [March 13, 2007] Employees must register contracts that are above county level with the Chinese labor and social security departments, and employers must register all employment contracts with local authorities, effective January 2007. [March 12, 2007] Eleven countries have increased their minimum wage, effective in 2007: Belarus, Bulgaria, Estonia, Hungary, Ireland, Latvia, Luxembourg, Portugal, Romania, Spain and Turkey. [March 12, 2007] Social security premiums increased effective January 1, 2007, for a variety of participants, including employers, voluntary members, self-employed people and Overseas Filipino Workers (OFW). Other employees will not see an increase in their contribution requirements. [March 8, 2007] The Pensions Regulator has published a Code of Practice that provides trustees with guidance on putting in place arrangements to meet the Member-Nominated Trustees/Member-Nominated Directors requirements. The change went into effect in November 2006. [March 8, 2007] Retirement funds in the 11 countries with the largest workplace retirement systems are increasing their investments in alternative assets as more and more companies and pension trustees focus on diversifying assets. [March 5, 2007] President Michelle Bachelet launched an ambitious plan to create a new pension system to cover lower- and middle-class individuals in a bill presented to Congress on Dec. 15, 2006. The bill is the result of a long citizen input process and is intended to eventually cover all 1 million people who now lack social security pensions. [March 5, 2007] A new government aid program that took effect on January 1, 2007, encourages working couples to take a break from work to care for newborns. The program aims to reverse a very low birth rate and the population decline in Germany. [March 5, 2007] CEOs saw considerable increases in the value of their unexercised stock options last year, with chief executives at higher-performing companies seeing particularly large gains. [March 1, 2007] Serbia has passed a series of changes to the Social Security System, the most recent of which reduces employer social security contributions from 40 percent to 35 percent of the average salary in the calendar quarter preceding payment. The change took effect on February 1, 2007. [March 1, 2007] Employers do not expect a decline in the rate of health benefit cost increases any time soon, and they are investing in on-site clinics, call-in medical help lines and employee health appraisals in efforts to control costs. [February 22, 2007] Employers face rigorous regulations on outsourcing work under a new law that became effective January 14, 2007. [February 21, 2007] From April 6, 2007, pensions payable from retirement annuity contracts will be taxed under the Pay-As-You-Earn system. The aim of this measure is to guarantee pensioners that the right amount of tax will be deducted from their income. Retirement annuity contracts have been used mainly by self-employed people. No new contracts commenced on or after July 1, 1988, when personal pension plans were introduced. [February 21, 2007] A new law that eliminates the state monopoly for reinsurance could lead to a change in the way employers finance employee medical benefit plans. [February 21, 2007] The Financial Services Agency released the first-ever comprehensive set of regulatory requirements to improve internal financial controls and management of companies in Japan. This “basic governance framework,” called J-SOX, is similar to the U.S. Sarbanes-Oxley Act and has been incorporated in the Financial Instruments and Exchange Law. It is scheduled to take effect in 2008. [February 20, 2007] Since joining the European Union on Jan. 1, 2007, Romania’s government has taken steps toward creating a three-pillar retirement system, which will redirect workers’ contributions to a new scheme and gradually reduce first pillar pensions. [February 20, 2007] A new resolution will require pension funds to make more information on their financial status publicly available. The Conselho de Gestão de Previdência Complementar (CGPC) – the board that sets regulations for much of Brazil’s pension system - passed Resolution Number 23 on Dec. 6, 2006, to improve the complimentary pension regime’s transparency, reduce its complexity and lower costs. [February 1, 2007] Institutional retirement fund assets in the world’s 11 major markets have more than doubled during the past ten years and now total US $23.2 billion. In many countries, this growth rate has the potential to mitigate some of the negative effects aging societies are expected to have on pension systems. [January 31, 2007] In an effort to boost the senior employment rate from the present 37.9 percent to a target of 50 percent by 2010, the French government released a new decree effective January 1, 2007. This measure aims to encourage people who have reached the retirement age of 60 to remain in the labor market by providing an extra pension bonus for each supplementary trimester of work. [January 30, 2007] Wide-ranging reforms to the way occupational pension plans in Spain are taxed became effective on January 1, 2007. These reforms have greatly reduced the tax breaks available on these pension arrangements and affect both contributions and emerging benefits. [January 25, 2007] The Belgian and Indian governments signed a pioneer social security agreement on November 3, 2006. As part of a group of measures to fortify the existing bilateral economic relations, this pact aims to attract Indian foreign investment in Belgium by exempting Indian workers from Belgian social security taxes. [January 24, 2007] Despite the ongoing debate about increasing the level of employer contributions to workers’ superannuation funds, a new analysis by Watson Wyatt Worldwide shows that the current 9 percent level likely will be sufficient for most workers, particularly if they work longer. [January 22, 2007] The retirement age would gradually increase and some aspects of private pensions would be simplified under a new U.K. Pensions Bill, which received its first reading in the House of Commons on November 28, 2006. [January 18, 2007] The Quebec provincial government adopted sweeping legislation on December 13, 2006, that aims to increase pension security. Bill 30 will revise funding requirements, enhance protection for pension plan members and ensure equitable treatment for active and non-active groups when using surplus to fund plan amendments. The measure’s effective dates will be phased in through January 2010. [January 17, 2007] Employers with private health care group schemes through BUPA Ireland will have to look for a new insurer within the next year, as the company announced its decision on Dec. 14, 2006, to shut down its health care business in Ireland. The 475,000 people covered by BUPA health care plans in Ireland will have until their next renewal date to find a new provider, as BUPA will honor existing contracts and yearly renewals up to Jan. 1, 2007. [January 10, 2007] In one of its first significant decisions on how it will implement the Pension Protection Act (PPA), the IRS issued a notice on Dec. 21, 2006, that defines hybrid pension plans and calls for public input on implementing other PPA provisions. [January 10, 2007] Regulations governing retirement funds changed dramatically on Jan. 1, 2007, as the new pension act took effect. Among the most significant changes are new minimum funding and solvency rules for pension funds, new requirements for pension agreements between employers and employees and new communication obligations for plan sponsors. [January 9, 2007] In an effort to attract multinational companies, Belgium implemented a new law Jan. 1, 2007, that takes the pan-European framework for pension funds a step further, providing tax benefits and other enticements for locating in Belgium. The law passed the Belgian parliament on Oct. 27, 2006. [January 4, 2007] Employees in China are very dissatisfied with their compensation and benefits, raising a retention challenge for employers in China’s tight labor market. [January 2, 2007] With bills to implement the federal government’s proposed superannuation changes now before parliament and gaining political support, early 2007 will be a prime time to begin preparing employees for the ramifications of the new laws. [December 21, 2006] The government is proposing further changes to the new tax regime for pensions that came into force on April 6, 2006, in an effort to prevent abuses and relax or simplify provisions that are proving difficult for pension schemes to administer. U.K. Chancellor of the Exchequer, Gordon Brown, announced the proposals in his pre-budget report on December 6, 2006. [December 21, 2006] The Internal Revenue Service has announced the annual cost-of-living and statutory adjustments of various dollar limits for employee benefit plans. [December 14, 2006] The value of stock option grants at the largest U.S. corporations fell significantly in 2005, as companies cut back on the number of options granted and the number of employees receiving them, a recent study by Watson Wyatt Worldwide has found. [December 14, 2006] President Bush signed a bill on Dec. 20, 2006, that will simplify the way employers implement and administer health savings accounts (HSAs) and will allow employees to set aside more money in their HSAs to pay for current and future medical expenses. The U.S. Congress had passed the bill during the final hours of the 2005-2006 legislative session. [December 12, 2006] Employers and employees would have to pay more into Germany’s publicly financed health care system if, as expected, the Parliament passes a law in February 2007 to fortify the ailing system. However, opposition from health insurance companies and the medical profession could force some amendments to the proposal. The proposal includes a number of changes to the way the system is financed and is thought likely to go into effect in April 2007. Chancellor Angela Merkel’s cabinet approved the proposal on October 25, 2006, after the German government coalition reached an agreement on it July 3. [December 7, 2006] Minimum wages have increased in Shanghai for full- and part-time employees. The increase, which went into effect Sept. 1, 2006, marks the 14th time Shanghai has adjusted its minimum wage since the inception of minimum wages in 1993. [December 4, 2006] In an effort to strengthen the defined contribution retirement system and continue improving its transparency, Mexican pension funds administrators (or Afores) have agreed to make public, on a semi-annual basis, the composition of their investment portfolios and the respective benchmark indices they used to measure their performance. [November 29, 2006] Ministry of Labor and Social Security (MoLSS) issued Policy No. 34 in September 2006 regarding the management of the funds of the supplementary retirement plans in social security bureaus. [November 29, 2006] The Ministry of Labor and Social Security’s decision to stop managing supplementary retirement programs as of the end of 2007 is raising questions for many companies and prompting some to consider setting up enterprise annuity arrangements. A recent Watson Wyatt Worldwide survey of multinational companies showed that many are still studying their options and awaiting more clarity on regulations and taxation that might apply to enterprise annuities. [November 29, 2006] Employers would be able to bypass national sectoral pensions and set up company supplementary pensions for their workers under a new law Parliament is considering. The government approved the draft finance law on September 29, 2006, and Parliament must examine and adopt it no later than December 31, 2006. [November 29, 2006] Beginning in 2007, pensioners will be able to allocate up to half of their pension income to their spouses or common-law partners throughout the tax year, if both parties agree. Following the changes to the tax treatment of income trusts announced in October 2006, the government plans to enact new legislation on pension income-splitting in part to provide some relief from the introduction of taxes on income trust returns, which will have a negative impact on some seniors. [November 28, 2006] Social Security benefits would be reduced for most employees except those who agree to work past age 65 under a far-reaching overhaul of the retirement system that won approval from the government, trade unions and employer federations on October 10, 2006. The long-discussed proposal will next be debated in the National Assembly. Most provisions are expected to take effect as of January 1, 2007, although some would not be implemented until 2008 or later. [November 28, 2006] On October 31, 2006, the federal government announced that it plans to make distributions on income trusts taxable, decreasing the attractiveness of the investments and possibly affecting the performance of Canadian stocks overall. Any changes could especially impact pension funds and other large investors. [November 16, 2006] The number of companies offering defined contribution plans increased nearly 50 percent in the last year, reaching more than 7,000 as of August 2006. The rate at which companies sponsor such plans is expected to increase even more rapidly as firms near the 2012 deadline to convert their existing Tax Qualified Pension Plans (TQPP) to other types of retirement plans. TQPPs are mainly used by foreign subsidiaries located in Japan. [November 15, 2006] To address two major concerns – unemployment and the need to increase living standards – the Serbian government recently passed a number of tax and social security amendments to promote employment. Unemployment is especially high among young and disabled Serbians. [November 9, 2006] As companies react to the recently enacted Pension Protection Act and new accounting rules, they appear to be considering investment approaches that better hedge their long-term pension liabilities, according to experts at Watson Wyatt. [November 8, 2006] New rules the Italian government has approved will require many employees to pay more tax on stock options. The difference between the exercise price and the normal market value of the shares will be taxed at the capital gains rate, rather than the higher income tax rate, only if a number of conditions are met. Law Decree 223/06 was approved on June 30, 2006, and came into effect on July 5. Further amendments were approved on October 3 (Law Decree 262/06). This decree is now with the Senate and is due to become law on December 2, 2006. [November 7, 2006] To encourage longer participation in the labor force, the government, trade unions and the employers’ confederation have agreed on a proposal to reform the pension system. The agreement, which was announced on July 13, 2006, came after two years of negotiations and must still be approved by the Council of Ministers and the Congress. [October 23, 2006] In a major decision, the Ministry of Labor Affairs announced on Aug. 2, 2006, that the minimum wage will increase by 12.3 percent, effective January 2007. [October 19, 2006] On October 11, 2006, the Department for Work and Pensions (DWP) published its consultation document on the amendments to the pension parts of the Employment Equality (Age) Discrimination Regulations 2006 that became effective on 1 October 2006 and which implements the provisions of the age strand of the EU’s Directive (2000/78/EC) on equal treatment, outlawing both direct and indirect discrimination on the grounds of age in relation to employment and vocational training. [October 16, 2006] A new social security agreement has been concluded between Australia and Switzerland. The agreement will include clauses in relation to superannuation which are designed to avoid double contributions when Australians are sent to work temporarily in Switzerland or when Swiss workers are sent to work temporarily in Australia. [October 12, 2006] In a press release issued on October 12, 2006, the European Commission announced that it has decided to commence proceedings against the Czech Republic, Hungary and Poland in relation to implementation of Directive 2003/41/EC on the activities and supervision of institutions for occupational retirement provision (the IORP Directive).
[October 12, 2006] The U.K. government has made several changes, mostly of a highly technical nature, to the new tax regime for pensions that came into force on April 6, 2006. Some of the changes are anti-avoidance measures intended to close tax loopholes, others rectify deficiencies in the original legislation and ensure that the provisions have the intended effect. Yet others are in response to lobbying for change by representatives of the pension industry and individual pension schemes. [October 10, 2006] The State Industrial Relations Commissions of New South Wales and Western Australia have increased the adult full-time minimum wage by AU $20 (US $15) a week. The increase brings the minimum wage to AU $504.40 (US $414) a week. The changes are effective in New South Wales as of July 7, 2006; they are effective in Western Australia as of Sept. 1, 2006. [October 5, 2006] Relatively simple changes to a sales force’s schedule – such as increasing the number of hours they spend with clients – and more incentive- and stock-based pay can make a big difference in the amount of revenue generated, according to a new survey by Watson Wyatt Worldwide. [October 5, 2006] The French government has introduced a new National Employment Plan that aims to increase the employment rate of workers age 55 and older. The two new decrees, published in the Official Gazette (J.O.) on June 8, 2006, will provide incentives for individuals to work past the retirement age of 65, and for employers to keep older people at work. The decrees authorizing the application of these measures were published in the J.O. on August 28, 2006. [October 2, 2006] More than half of U.S. workers are worried their health care benefit costs will increase and the scope of their benefits will decrease over the next few years, and employers are underestimating the role that such benefits play in retaining top employees, according to two studies by Watson Wyatt Worldwide. [September 27, 2006] The Canadian labor market is expected to experience substantial shortfalls over the coming years as baby boomers enter retirement. Filling jobs and maintaining Canada’s standard of living will require increasing immigration, extending older people’s working careers and sustaining labor productivity rates at higher levels than in previous decades, a new report from Watson Wyatt Worldwide concludes. [September 26, 2006] Few firms have adopted new retirement plans since a law to encourage companies to voluntarily offer retirement benefits went into effect in December 2005. However, companies in some industries are beginning to analyze their retirement plan options, suggesting more action will occur on the issue in the future. [September 26, 2006] In an effort to increase retirement savings, the Central Provident Fund Board has decided to limit the transfer of excess contributions from Medisave to ordinary accounts and to restrict the purchase of multiple properties with Central Provident Fund (CPF) savings. The changes took effect July 1, 2006.
[September 25, 2006] The German government is adjusting controls related to its unemployment benefits system. The proposed amendments to the Hartz IV law took effect on Aug. 1, 2006, after the approval of the German upper house of parliament, the Bundesrat, in July. The amendments apply stricter controls, cooperation between the different government agencies and harsher sanctions on those found abusing the system. [September 21, 2006] Changes to the Dutch unemployment act that will reduce the formal dismissal procedures employers must follow will take effect on October 1, 2006. The simplification is included in the new Werkloosheidswet, approved by Parliament on June 27, 2006. [September 21, 2006] Total assets in the world’s largest pension funds grew by about 12 percent or US $1 trillion during 2005, according to a study by Watson Wyatt Worldwide and Pensions & Investments, a U.S. investment newspaper. [September 20, 2006] Employers across Asia believe that the benefits employees value will change significantly as societies age, according to a new study by Watson Wyatt Worldwide. [September 19, 2006] A revised version of the Labor Code will take effect on Oct. 6, 2006, removing many inconsistencies and contradictions from the previous version and making some more substantial changes. Altogether, the amendments, which the parliament approved on June 30, 2006, include modifying more than 300 articles of the code and adding 13 new articles. [September 13, 2006] With companies becoming more global, a growing number are shifting to more centralized compensation and benefits structures to help ensure that employees and executives around the world share the same incentives, according to a new survey by Watson Wyatt Worldwide, and WorldatWork, the association for human resources professionals. [September 13, 2006] Redundancy packages may have to be re-visited due to the postponement of age discrimination regulations for pensions. The effective date for the legislation was moved from October 1, 2006, to December 1, 2006, for pension schemes. Other aspects of the legislation will still go into effect on October 1. [September 13, 2006] A little-understood law requiring employers to provide health care coverage to employees who are terminated without cause or who retire threatens to have negative cost and accounting ramifications for companies in Brazil. [September 5, 2006] On June 2, 2006, the Federal Government released proposed amendments to the Pension Benefits Standards Regulations (Draft Regulations) together with a Regulatory Impact Analysis Statement. The Draft Regulations are designed to provide the solvency funding relief for federally regulated defined benefit (DB) pension plans announced in the May 2, 2006 Federal Budget. [August 31, 2006] The Argentine Government is proposing to remove the mandatory health insurance contribution ceiling. Currently, employees contribute 3 percent of their monthly income to health insurance, subject to a maximum monthly contribution of AR$144 / US$ 46 (3 percent of AR$ 4,800 / US$ 1,543). [August 28, 2006] Following the proposals for sweeping changes to superannuation announced in the Australian Budget in May, some transitional measures to assist members planning for retirement have been announced. [August 11, 2006] Congress has approved a major overhaul of the pension rules, finally concluding a debate that has swirled around Capitol Hill for years. When President Bush signs the Pension Protection Act (PPA) of 2006 (H.R.4) into law, its sweeping changes will affect defined benefit plan sponsors, workers and — eventually — retirees. [August 4, 2006] The Securities and Exchange Commission (SEC) voted unanimously on July 27 to adopt a sweeping overhaul of proxy disclosures for executive compensation. The new disclosures will give shareholders a far more complete picture of compensation paid and payable to the CEO, the CFO and the three most highly compensated named executive officers (NEOs). [August 2, 2006] President Bush signed the Tax Increase Prevention and Reconciliation Act (H.R.4297, P.L.109-222) into law on May 17, 2006. The act removes income restrictions on converting traditional IRAs to Roth IRAs. It also imposes new penalties and reporting requirements on managers of tax-exempt entities — including qualified plans, IRAs and other tax-favored arrangements, as well as charities and more traditional tax-exempt organizations — who engage in certain tax-shelter transactions [August 1, 2006] The Italian Pension Fund supervisory authority, COVIP, recently issued guidelines on the regulatory structure for supplementary pensions. This move, presaged in the legislative decree no. 252 of 5 December 2005. [July 27, 2006] On 9 May 2006 the Government, trade unions and employers associations signed a labour market reform agreement. The agreement limits the implementation of consecutive short-term employment contracts and will therefore reduce employers’ costs. It became Law through the Royal Decree – Act 5/2006 which was enacted on 9 June 2006. [July 26, 2006] Many young managers in Greater China are burning out or opting to start their own businesses, making retention of such talent a key issue for companies operating in the country. Key ways to ensure the long-term success of these managers are to provide coaching and role models, offer the right opportunities for development and put in place the right compensation mix. [July 24, 2006] Changes to the social security system in Portugal have been under discussion in government circles for several months with a number of announcements being made indicating that changes would soon be forthcoming. The Government has now launched a consultation process on the changes it proposes, with the objective of issuing new legislation in the latter part of 2006 to take effect on 1 January 2007. [July 21, 2006] With anti-age discrimination legislation set to take effect 1 October, 2006, companies in the United Kingdom should examine current policies where age might be a factor in employee benefits or they risk being liable paying unlimited compensation for non-compliance. [July 20, 2006] The Financial Accounting Standards Board confirmed July 12, 2006, that its new rules on postretirement benefit accounting will require pension plan sponsors to report benefit obligations based on estimated future salary increases. [July 13, 2006] New figures from the Office for National Statistics show that employer contributions to occupational pension schemes in the United Kingdom have increased by nearly 60 percent since last year. Employers are now contributing eight times what employees pay. [July 13, 2006] Two new decrees released on June 20, 2006, mandate that workers receive individual status reports and a preliminary estimate of the value of their pensions. The directive enforces provisions of the Fillon Law of 2003 concerning the right of disclosure for pension scheme affiliates. This action is addressed to the 38 organizations managing compulsory retirement schemes, which form the “Public Interest Organization” (GIP – Groupe d’interêt public) created in 2003 to set the information process. [July 11, 2006] On 20 June 2006, the Danish parliament adopted a series of reforms to better enable its welfare system to meet the challenges of an aging population. [July 5, 2006] Some individuals who have made voluntary National Insurance contributions (NICs) since May 25, 2006, in an effort to qualify for state benefits for a specific year will be entitled to a refund of their money. [July 3, 2006] One in five U.K. employees feels insecure in their job because of the risk it will be “offshored” to a low-cost country such as India or China, while two in five say that they feel less secure in their jobs than they did three years ago, according to new Watson Wyatt research. [July 1, 2006] With the pension reform bill at a critical point in Congress, a new analysis by Watson Wyatt Worldwide shows that a significant number of the nation’s largest companies are reconsidering their commitment to providing traditional pensions to millions of U.S. workers. As a result, Watson Wyatt is calling on lawmakers to take advantage of this historic opportunity to rework the current pension laws to help companies continue to sponsor such plans. [June 28, 2006] A vast majority of employers are planning to curtail their retiree medical plans for current and future retirees in the next five years, according to a new study by Watson Wyatt Worldwide. [June 28, 2006] Most corporate directors and institutional investors agree that the U.S. executive pay model has tarnished corporate America’s image. However, they disagree over whether it has resulted in improved corporate performance or has led to excessive pay levels, according to a new report by Watson Wyatt Worldwide. [June 20, 2006] A bill introduced by the Government of Quebec on June 14, 2006, would significantly amend the province’s pension legislation in an attempt to protect pension benefits by improving plan funding, enhancing plan governance and better defining pension plan administrators’ responsibilities. [June 20, 2006] Since March 2006, employers must register on the website of the “Comisión Nacional del Sistema de Ahorro para el Retiro” (CONSAR) all supplemental pension plans if they want to receive certain fiscal exemptions. [June 12, 2006] A new social welfare law reform and pensions act, approved by the Irish legislative body, the Oireachtas, on March 23, 2006, and signed by the president on March 24, 2006, will combine all non-contributory payments for people 66 years of age and older into one standard pension scheme. [June 9, 2006] The Finance Act of 2006, approved by the Irish legislative body, the Oireachtas, on March 29, 2006, and signed by the president on March 31, 2006, sets limits on the amount of pension funds or lump-sum payments that can be accumulated tax-free and makes a host of other changes to pension tax law. [June 9, 2006] The tax bill President Bush recently signed places a cap on the amount of housing allowances U.S. residents living abroad can receive tax-free from their employer. As a result of the change and others in the bill, many expatriates will pay more income tax to the U.S. Treasury in 2006 and thereafter. [June 8, 2006] Employers in Guangzhou may need to ensure that their compensation and benefits packages remain competitive after a ceiling on housing funds goes into effect July 1, 2006. [June 7, 2006] Multinational companies have developed a health and productivity strategy in the United States, but they have not been as proactive in other regions of the world, according to a new survey by Watson Wyatt Worldwide. [June 4, 2006] Several recent changes to regulations governing supplementary pensions for senior executives are expected to have significant contribution ramifications for employers and tax consequences for plan participants. [June 1, 2006] An Educational Note issued by the Canadian Institute of Actuaries in April 2006 could alleviate solvency requirements for pension plans with at least $1 billion in solvency liabilities and for smaller plans that provide indexed retirement benefits. [May 25, 2006] On May 1, 2006, Prime Minister José Socrates laid before parliament his plans for reforming pension provisions, including linking the retirement age to average life expectancy and tying increases in pension payouts to the growth in the gross domestic product. The government is in discussion with the largest trade unions and the services and commercial employer federations concerning the proposed changes. The legislation is expected to be published during 2006 and to become effective in 2007. [May 25, 2006] As of April 1, 2006, a new accounting standard has been put in place that increases disclosure requirements and makes other changes that will impact employers. Indian Accounting Standard 15 (R) replaces the existing AS 15 standard. [May 16, 2006] Treasurer Paul Costello’s 2006/2007 Federal Budget, which was laid before parliament on 8 May 2006, included proposals for sweeping changes aimed at simplifying and streamlining superannuation. If implemented as announced, these proposals will see a significant simplification of superannuation contributions and benefits rules from 1 July 2007, largely without complicated grandfathering. However, there is some devil in the detail. [May 15, 2006] In February 2006, a new immigration scheme to attract new talented personnel to settle in Hong Kong was announced by the Hong Kong government. The Quality Migrant Admission Scheme (QMAS) has been developed to attract talented potential employees from mainland China and from other parts of the world to live and work in the province. [May 15, 2006] A draft of the Second Pension Reform Act (“Zweites Gesetz zur Änderung des Betriebsrentengesetzes”), agreed to by the German federal government on May 3, 2006, would change the financing method for legal insolvency insurance and convert the current “pay-as-you-go” plus partial funding system to a fully funded system. The change is likely to increase plan sponsors’ contribution rates by more than 1 permille for each of the next 15 years. The Senate of the Federal Parliament is expected to vote on the bill in November 2006, making it likely that the law will take effect this year. [May 9, 2006] On April 6, 2006, “A day”, a new tax regime, came into effect for all tax-privileged pension arrangements. Under the new regime, few restrictions will apply to contributions to, and benefits from, registered schemes. However, an upper limit has been set on the tax advantages available. The primary method for achieving this will be to test the value of an individual’s tax-privileged pension benefits, from all registered schemes, against a lifetime allowance, initially set at 1.5 million pounds. Benefits valued in excess of this amount will be subject to additional tax charges. [May 5, 2006] Regulations have been approved by the U.K. Parliament that will implement the age strand of the European Union’s directive on Equal Treatment in Employment. The Regulations apply to employment and vocational training and prohibit direct and indirect age discrimination, and harassment and victimization on grounds of age. [May 4, 2006] With an increasing number of the largest U.S. companies offering defined contribution plans only to new hires, Watson Wyatt Worldwide urged Congress to act on pension reform and encouraged employers to get a true reading of their plans’ cost structure and of related workforce management issues before making plan changes. [May 3, 2006] The 2006 federal budget Canadian Finance Minister Jim Flaherty proposed May 2, 2006, includes a series of measures that would provide temporary solvency funding relief for federally regulated defined benefit plans. The proposal must be put into regulations and passed before it becomes law. [May 2, 2006] Chief Financial Officers are increasingly concerned that the pension crisis in Canada is widespread and likely to persist beyond the next few years, according to a recent survey by Watson Wyatt Worldwide and The Conference Board of Canada. [May 2, 2006] The U.S. Department of Energy announced April 27, 2006, that it will no longer cover the cost of defined benefit pensions for its contractors’ new employees. Under the new policy, the department will reimburse contractors only for defined contribution plan benefits and will significantly restrict reimbursements for contributions to such plans. Although the department will continue reimbursing contractors for pensions provided to existing employees, reimbursements will be subject to prohibitive new limits on the value and types of benefits provided. [May 1, 2006] In an effort to strengthen the Netherlands’ position in the international labor market, the Lower House submitted a proposal on April 21, 2006, to simplify the Working Hours Act and increase the maximum number of hours workers can be on the job. The reform is part of a broader deregulation of Dutch workplace laws. Parliament still has to agree with the proposal; the bill will most likely be implemented by January 2007. [May 1, 2006] A recently enacted law that amended Puerto Rico’s Internal Revenue Code allows trusts with trustees and/or paying agents based on the island to apply a reduced income tax withholding rate on lump sum distributions. [April 30, 2006] After more than a decade of negotiating, Swedish employers and unions representing white-collar workers reached an agreement April 25, 2006, that transforms the country’s ITP plan into a defined contribution system for younger workers. It would require employers to contribute into the system 30 percent of employees’ salaries over a base level. [April 27, 2006] The Manpower Minister of Singapore, Dr. Ng Eng Hen, recently announced the creation of an international advisory panel for the country’s S$120 billion (US$75 billion) state pension scheme, the Central Provident Fund (CPF). The move is one of many steps being taken to improve the CPF system and enhance the return on investments. Nearly 70 percent of all CPF Investment Scheme (CPFIS) investors earned less than the 2.5 percent annual interest guaranteed by the CPF between 1993 and 2002. [April 20, 2006] On April 19, 2006, Parliament approved the social security reform bill that was originally planned for adoption in July 2006. During its delayed passage, the bill was subject to extensive revision. In its final form, it included measures to gradually lift the retirement age to 65 by 2048 and to introduce universal health coverage. [April 19, 2006] In an effort to narrow the gap between retirement benefits for the civil service and the private sector, Taiwan has implemented a new rule that caps pension and retirement benefits at 85 percent of salary for all civil servants, teachers and military personnel with up to 25 years of service. [April 19, 2006] The state of Massachusetts enacted a law April 12, 2006, that requires all residents to purchase health insurance by July 1, 2007, and provides subsidized, low-cost insurance for those who cannot afford it. Those that do not comply with the mandate will lose tax benefits, including the personal exemption on state income taxes. [April 18, 2006] Companies that involve human resources professionals in international merger and acquisition deals early on are often better able to deal with the “people” issues that can make or break the combined company, Jim McKay, mergers and acquisitions engagement leader for Watson Wyatt writes in a recent article in Harvard Business Review China. [April 17, 2006] The French Parliament approved a new plan April 13, 2006, to replace the controversial First Job Contract (CPE) bill. The new law focuses on providing state assistance to companies that hire young people and is expected to put an end to the social crisis generated by the CPE since its presentation to the National Assembly last January by Prime Minister Dominique de Villepin. [April 13, 2006] The Bulgarian parliament approved amendments to the Social Security code, on Feb. 9, 2006, relaxing the investment restrictions imposed on pension funds. [April 10, 2006] Effective April 1, 2006, the Employees Provident Fund (EPF) introduced more flexibility into its withdrawals scheme. Contributors can now withdraw funds from their Account II savings once each year in order to reduce or settle their housing loans. The minimum withdrawal for this purpose is RM500 (US$ 138) and no further withdrawals are allowed until a calendar year has elapsed. Previously, such withdrawals could only be made once every three years. [April 1, 2006] In an effort to combat a declining labor force and to address other issues associated with an aging society, the Japanese government is implementing a new law to encourage employers to increase the mandatory retirement age from 60 to 65 and to better coordinate the beginning of pension coverage with later retirement ages. [March 28, 2006] Watson Wyatt Worldwide has launched a special section on its web site that focuses on the needs of multinational companies. This new web resource highlights information on the current business issues that are playing out on the world stage - ranging from global competition to offshore outsourcing, to cross-border mergers and acquisitions. It is designed to help multinational companies stay up-to-date with the key HR, compensation and benefits issues affecting their businesses today. [March 28, 2006] On 22 March 2006, the UK Chancellor announced the details of the UK Budget for 2006 / 2007. Highlights of some of the more significant benefits and retirement-related points are available in Watson Wyatt summary that can be accessed below. [March 27, 2006] Multinational companies are taking steps in many parts of the world to plan for the possibility of an avian flu outbreak, a new survey by Watson Wyatt Worldwide has found. [March 21, 2006] With the United Kingdom adopting the European Union Pensions Directive, U.K. employers operating pension schemes that cover workers elsewhere in Europe need to apply for approval of their schemes by March 29, 2006, or need to take steps to ensure their schemes are not considered cross-border. [March 16, 2006] A growing number of U.S. employers are implementing consumer-driven health care plans to help control rising costs, according to a survey conducted by Watson Wyatt Worldwide and the National Business Group on Health. Those seeing the most success are implementing a wide variety of programs to encourage employees to be more discerning consumers of health care. [March 16, 2006] In an interview in Watson Wyatt’s Perspective magazine, Hong Kong Stock Exchange CEO Paul Chow said companies in the country would benefit from more disclosure of executive compensation packages.
[March 16, 2006] Most U.S. companies do not have immediate plans to change their compensation programs in response to the Securities and Exchange Commission’s proposal requiring better disclosure of executive pay programs, according to a recent poll conducted by Watson Wyatt. [March 14, 2006] The Argentine Federation of Accountants recently released Technical Rule 23, establishing the guidelines for recognizing liabilities and expenses related to long-term benefits. This rule is mandatory for all financial statements dated after Jan. 1, 2006. [March 14, 2006] The Argentine government has extended through Dec. 31, 2006, the reduction in mandatory employers’ contributions first established by law in March 2004. The law and its complementing decrees, including the recently announced Decree 31/2006, put into place a 33 percent cut for each new employee hired and a 50 percent discount for new workers included in the “Jefes y Jefas del Hogar” plan, a government program that provides financial aid to unemployed heads of household. [March 10, 2006] Workers who have contributed to different pension schemes will be able to draw a pension by summing up their contribution periods, according to a recent government decree. [March 3, 2006] It has been a year since Fringe Benefit Tax (FBT) was introduced. We have seen much lobbying from corporate India that valid business expenditure is being taxed under FBT and that superannuation (pension) is subject to double taxation. [March 1, 2006] The Swiss pension fund association ASIP's comparison of pension fund performance carried out in association with Watson Wyatt has revealed an average investment return for 2005 of 13 per cent for the participating funds. [March 1, 2006] The State Council has announced new regulations that would make several changes to the retirement component of China's social security system but the implementation details need to be sorted out by local provinces. [February 24, 2006] On 15 February 2006. the Canadian Minister of Human Resources and Social Development, announced the signing of an international social security agreement with Japan. [February 23, 2006] In the latest edition of 'Perspectives, Watson Wyatt's regular newsletter on issues and trends in Swiss pension provision, Victor Ackermann and Corinne Antonica examine the likely impact of the third phase of the revision of the Swiss occupational pensions law (BVG) which took effect on 1 January 2006. [February 23, 2006] Oil's 12% increase was the feature of the month under review. This increment was caused by several factors such as the dispute between Russia and the Ukraine over natural gas supplies; the stand-off between Iran and the international community over Iran's nuclear ambitions; the Hamas victory in the Palestinian elections and the attacks on Nigerian oil refineries. [February 22, 2006] The February edition of Watson Wyatt Australia’s publication, Bulletin, that focuses on current issues in retirement provision in Australia is now available. This edition reviews recent developments in the Related Party disclosures, and accounting for employee benefits. [February 22, 2006] Towards the end of 2005, a new Financial Services Law was implemented in Israel. Clause 20 of this law introduces a radical change in the administration or retirement benefit plans. [February 21, 2006] The main government-operated savings plan in India, the Employees Provident Fund, recently announced it will pay an interest rate of 8.5 percent for the financial year 2005-2006 to its 40 million participants. [February 20, 2006] Pooling networks, once prized solely for the financial savings they offer multinational companies, are increasingly valued for the information they provide. [February 16, 2006] For the fourth consecutive year, the increase in the cost of providing health care benefits to US workers slowed as companies stepped up their efforts to control rising costs, according to the results of a forthcoming survey conducted by Watson Wyatt Worldwide and the National Business Group on Health. [February 16, 2006] Controversy over the so-called wage undercutting in the enlarged European Union has brought the 1996 EU Posted Workers’ Directive under increasing scrutiny. The measure, which guarantees certain staff hired in one Member State and temporarily transferred to work in another the same minimum pay and conditions as their local counterparts during the posting now needs ‘fine-tuning’, according to members of the European Parliament. [February 14, 2006] On 10 February 2006, the Dutch Minister of Social Affairs announced a change in the Regulation on Resumption of Work for partially Disabled Persons (Regeling werkhervatting gedeeltelijk arbeidsongeschikten, WGA). [February 14, 2006] Workers who have made contributions to social security systems in Argentina, Brazil, Paraguay or Uruguay will soon be eligible to claim social security benefits in any of the MERCOSUR countries. The agreement went into effect on June 1, 2005. [February 8, 2006] A federal budget bill that became law Feb. 8, 2006, increased the premiums single- and multi-employer pension plans pay to the Pension Benefit Guaranty Corporation (PBGC). The higher premiums will take effect for plan years beginning in 2006. [February 8, 2006] The majority of European foundations do not see a connection between spending and investment policy, according to Watson Wyatt research released today, with only around 30 per cent saying that investment performance was an important factor when deciding disbursements. [January 31, 2006] The Prime Minister's cabinet approved a long-awaited reform of the pension system Nov. 24, 2005. [January 31, 2006] Few U.S.-based multinationals are doing a good job of communicating with their employees and business units worldwide, according to a recent study by Watson Wyatt Worldwide. [January 31, 2006] Growth of institutional pension assets in 2005 in the 11 major markets, measured in local currencies, was around 17 per cent (up from seven per cent in 2004) according to Watson Wyatt and assets now total US$16.4 trillion. [January 30, 2006] It may not be widely known that the Federal Government’s ‘Work Choices’ Workplace Relations changes may have an impact on the provision of superannuation benefits by some employers. [January 30, 2006] The potential onset of 'corporate governance fatigue' is a risk for all publicly-quoted companies, which needs to be resisted strongly. The commitment of corporate Boards to fairness, transparency and accountability has an appreciable effect on whether the greatest practicable enhancement is achieved over the period of their shareholders' investment. [January 26, 2006] The major HR challenge facing multinational companies offshoring to India is not in recruiting, but in the retention of talent in a growth market. Talking to Simon Dudley in the latest of Watson Wyatt’s 'Rewarding Conversations' web-based video interviews, Bob Charles, head of employee benefits consulting in Asia-Pacific at Watson Wyatt, said "The market has moved on and companies are being forced to review their strategy for reducing the cost of employee turnover." [January 26, 2006] The Legislative Assembly of Ontario has passed a law abolishing mandatory retirement at age 65, in an effort to provide older workers more options. The legislation, which passed third reading on Dec. 8, 2005, will take effect on Dec. 12, 2006, one year after it received royal assent. [January 23, 2006] The U.S. Securities and Exchange Commission voted Jan. 17, 2006, to propose significant changes to the executive compensation disclosures required on proxy statements. [January 20, 2006] New rules the Federal Accounting Standards Board is considering that would move under- or over-funded post-retirement benefit obligations onto companies' balance sheets, would significantly affect Fortune 1000 companies and have a disparate impact on industries. [January 17, 2006] In October 2005, a Watson Wyatt Global News Brief reported on the changing scenario with respect to the state provision of disability benefits in the Netherlands effective 1 January 2006 under the Wet Werk en Inkomen naar Arbeidsvermogen (WIA). [January 16, 2006] A new tax law took effect January 1, 2006 that will encourage individuals to save for retirement by increasing the deduction for personal savings and annuity income, among other changes. [January 16, 2006] Watson Wyatt’s December Special Memorandum provides an informative and easy-to-use summary of information relating to the changes in Government benefit levels for 2006 in Canada. [December 29, 2005] U.S. workers temporarily assigned to Japan for duties and Japanese workers temporarily sent to the United States will benefit from an agreement by the two countries’ governments to end double payments and allow the computation of social security credits in both countries. [December 27, 2005] The Department of Finance has published final regulations that modify the previous income tax treatment of deferred income pension plans. [December 22, 2005] On 8 December 2005, the Australian Senate approved the Tax Laws Amendment (Superannuation Contribution Splitting) Bill that will allow Australians to have the option of splitting superannuation contributions with their spouse for the first time. [December 21, 2005] In an effort to reduce a poverty rate estimated at 60 percent, employees in Ecuador will be able to withdraw savings from their retirement accounts, taking an anticipated US$734 million from the funds. [December 20, 2005] The November edition of Brans Brief, our regular update on current issues in pensions, life insurance and human capital developments in the Netherlands contains articles on a number of issues that may affect multinationals with Dutch operations. [December 20, 2005] Spain and Colombia have signed a social security agreement that allows individuals who work in either country to receive pension and social security benefits. [December 13, 2005] With Quebec's new parental insurance system starting up January 1, 2006, employers in the province need to make a number of changes to payroll and reporting systems and human resources procedures to prepare. [December 12, 2005] On 5 December 2005, the UK Chancellor delivered the pre-Budget report in relation to the tax year commencing on 6 April 2006. [December 8, 2005] A growing number of large employers are boosting efforts to improve workers' health and productivity, a survey by Watson Wyatt Worldwide and the National Business Group on Health has found. [December 7, 2005] With the end of the legislative session not far off, bills to broadly reform the U.S. pension system began making their way through Congress, but it was not clear if they would become law. [December 6, 2005] On 30 November 2005, the Pensions Commission released 'A New Pension Settlement for the Twenty-First Century', its Second Report on the likely evolution of the UK pension system if policy is unchanged, and its recommendations for a new policy direction. [November 30, 2005] November was an excellent month for the Portuguese pension fund industry, recording its best return of the year to date. The key equity markets recovered the losses of the previous month, reaching new highs in Europe (over 3 years) and the US (over 4 years). Higher than expected corporate results, favourable macro-economic factors, a drop in the oil price and a reduced Euro value were the principle causes for the upturn. [November 30, 2005] On 21 November 2005, the Government circulated its response to the Consultation on their draft cross-border regulations. The Department for Work and Pensions (DWP) has not yet issued the revised cross-border regulations, but the response to the Consultation document provides a clear indication of what the final regulations will contain. [November 29, 2005] Under a law Brazilian President Luiz Inacio Lula da Silva signed November 21, 2005, certain pension plan participants will have until December 31, 2005 to designate the way their plans will be taxed. [November 23, 2005] Chileans who work in Peru and Peruvians who work in Chile will be able to receive pension and health benefits in either country under an agreement signed by both governments. [November 18, 2005] Fearing an increase in poverty, Argentina's government has opted to keep employees' contribution rates to individual retirement accounts at the current level of 7 percent for another year, rejecting a scheduled increase of two percentage points in both July and October 2005. [November 18, 2005] The Hong Kong Institute of Certified Public Accountants issued HKAS 19 in December 2001. This essentially is International Accounting Standard 19 (IAS 19) adapted as applicable to Hong Kong companies. [November 15, 2005] UK employees are among the most likely in Europe actively to consider leaving their job in the next 12 months, according to research from Watson Wyatt. [November 15, 2005] On 1 January 2006, the new savings plan, ‘Levensloopregeling’, will become available. This new Life Cycle Plan is a means whereby employees may save, on a pre-tax basis, up to 12% of gross salary each year into a special savings account (these accounts will be offered by banks and insurance companies). The maximum amount that can be saved will be 210% of salary. [November 14, 2005] On 6 October 2005, the Department for Work and Pensions announced that the new scheme funding requirements arising from the European Pensions Directive and the Pensions Act 2004 will come into force slightly later than expected, on 30 December 2005. By that time various Regulations are expected to be published setting out more details of the scheme-specific funding regime. In addition, the Code of Practice "Funding Defined Benefits" from the Pensions Regulator will be laid before Parliament and specimen funding documents will also be made available. [November 14, 2005] The Financial Accounting Standards Board has launched a review of how post-retirement benefits are recorded on financial statements, raising the possibility that companies providing such benefits could face significant changes by the end of 2006. [November 10, 2005] Companies that communicate effectively with their workers financially outperform those that do not, according to a major study of U.S. and Canadian employers by Watson Wyatt Worldwide, a human capital consulting firm. [November 8, 2005] Watson Wyatt welcomes the Pensions Regulator’s publication today of consultation on how it intends to operate under the new funding regime for defined benefit pension schemes. But the firm, which is the actuarial adviser to many of the UK’s largest pension schemes, is concerned that a high number of employers may be unable to afford to meet the Regulator’s funding targets and that the Regulator may be overstretching itself.
[October 31, 2005] On 3 July 2005, the controversial amendment to the Spanish civil code (Ley 13/2005, 1 July 2005) which made marriages between homosexual couple legal and thereby granted such couples the same rights in relation to pension as a heterosexual couple came into force. [October 31, 2005] The proposed State Budget for 2006 introduces several important changes in Portuguese fiscal legislation, many of which will affect how companies reward their employees. The attached note prepared by Watson Wyatt Portugal highlights certain features in the proposed legislation as they affect the reward environment in Portugal. Assuming that the Budget is passed by the National Assembly, then these changes will take effect from 1 January 2006. [October 31, 2005] Since 1992 Watson Wyatt has carried out a quarterly performance comparison for CMIF (Conference of Managers of Investment Foundations). The survey helps pension funds to evaluate and analyse past returns and risks for different asset classes. The CMIF includes 20 investment foundations with about CHF 66 billion under management. [October 31, 2005] The U.S. Department of the Treasury and the IRS recently issued proposed regulations under section 409A, which governs plans and arrangements that provide non-qualified deferred compensation (NQDC). [October 31, 2005] Korea’s new corporate pension law, Employee Retirement Benefit Security Act (ERBSA), takes effect on 1 December 2005. [October 31, 2005] In a press release on 20 October 2005 the EU Commission announced a proposal for a new Directive, aimed at easing the procedure for the growing numbers of workers wishing to switch jobs or countries within the European Union through the reduction of the potential loss of substantial occupational pension benefits that can arise when changing jobs and locations. [October 31, 2005] Pension reforms implemented by the Japanese government in October 2005 make it easier for most employees to transfer their pension benefits if they switch jobs. As a result, companies with pension plans need to have procedures in place to allow workers to transfer pensions to subsequent employers. [October 28, 2005] Korea's Labour Standards Act ("LSA") mandates that all employers with more than four employees must provide a severance ("Retirement Allowance") benefit equal to one-month's final average salary for each year of service. [October 22, 2005] From January 1, 2006, the state provision of disability benefits in the Netherlands will change. [October 20, 2005] Canadian employers are concerned about the cost of health-related absences from the workplace, but are not prepared to address the situation in a comprehensive, proactive manner, according to a new survey released by Watson Wyatt. [October 7, 2005] Pension schemes are actively looking to find ways of reducing their risk-based levy to the Pensions Protection Fund (PPF), according to research by Watson Wyatt. [October 6, 2005] On September 8, the Senate Health, Education, Labor and Pensions (HELP) Committee approved the Defined Benefit Security Act (DBSA). [September 29, 2005] The IRS has finalized regulations and proposed additional regulations addressing when plan sponsors may eliminate or reduce early retirement benefits, retirement-type subsidies and optional forms of benefit without having to grandfather the eliminated or reduced benefit. [September 29, 2005] For this year only, there is no need to file for the October 31 extension for the Retiree Drug Subsidy (RDS) as the Centers for Medicare and Medicaid Services (CMS) recently announced that for 2005 the exemption is automatic. [September 23, 2005] Watson Wyatt’s 2005 UK Healthcare Survey solicited the views of over 250 leading UK employers on the provision of private medical benefits to employees as well as the management of employee absence. Many of our participating employers are FTSE 250 companies, partnerships or major UK subsidiaries of multinationals. Combined, they represent a range of UK industry sectors and employ in excess of 1 million employees within the private sector. We also surveyed approximately 1,200 UK private sector employees, gauging their views and experiences in relation both to their medical benefits and absence from work. [September 20, 2005] The number of employees in Danish commerce and services who opt for fringe benefits in cash or kind instead of increases in basic pay is growing, finds a survey by DHS, the employers’ association for the sector. The proportion of employers offering such benefits has risen from 44% to 51% in three years, with another 16% actively contemplating joining them [September 20, 2005] Draft European Union legislation on the working conditions of agency-supplied temporary staff looks set for a rewrite, as part of the fresh EU onslaught on unnecessary regulation and bureaucratic red tape. EU laws already in force will also come up for scrutiny as part of the same exercise, with the aim of consolidating and simplifying them while retaining their core purpose. Among those dealing with employment issues, the various directives against discrimination at work are front-runners for attention. [September 20, 2005] Draft legislation to reform state retirement and disability pensions and to provide for the creation of voluntary supplementary private pension funds is now before the Serbian parliament. But many of the details of both measures remain to be worked out. [September 20, 2005] Foreign companies temporarily operating in Sweden with an imported workforce will face industrial action if they decline to sign up to local collective agreements on pay and conditions, Swedish trade unions say. And, at least pending the final verdict in the high-profile court case involving a Latvian constructor, that could see them forced out of the country. [September 20, 2005] Funding for short-term incentives (STIs) such as annual bonuses increased significantly in 2005 to nearly 100 percent of targeted payouts, according to a new survey conducted by Watson Wyatt and WorldatWork. [September 19, 2005] India's controversial Fringe Benefit Tax (FBT) was introduced April 1, 2005. Hopes that the tax would be "rolled back" following corporate lobbying have proved misplaced. [September 19, 2005] The Pension Protection Act (PPA) approved by the House Education and the Workforce Committee on June 30, 2005, would significantly reform the rules governing multi-employer pension plans. [September 8, 2005] The United Kingdom is obliged to enter into its national law the requirements of the EU Directive 2003/41/EC, the Pensions Directive. Many of its requirements either existed already within UK pension legislation or were introduced by the Finance Act 2004 and the Pensions Act 2004. As regards the cross-border aspects which will create the potential for a pan-European pension plan, the UK’s Department for Work and Pensions (DWP) published draft regulations for consultation on 4 August 2005. Interested parties have until 30 September 2005 to provide their comments. [August 31, 2005] National insurance rebates paid to employers and members of company pension schemes that are contracted-out of the State Second Pension need to be raised by at least 25 percent, according to Watson Wyatt. [August 31, 2005] Over the past four months, there have been significant developments concerning the implementation of the Pensions and Finance Acts 2004. [August 26, 2005] Arne Genschou has been appointed to lead Watson Wyatt's Stockholm office, the international consulting firm's base in the Nordic region. [August 25, 2005] In a recent interview with the Financial Times, Bob Charles, head of retirement benefits consulting for Watson Wyatt in the Asia Pacific region commented on the role foreign multinationals will have in driving reform of occupational pensions in China, as they seek to win the war for the available talent. [August 24, 2005] Organizations with superior recruiting practices — such as filling jobs
quickly, hiring their first-choice candidate and using employee
referrals — financially outperform those with less effective programs,
according to a new study by Watson Wyatt. [August 16, 2005] July was a month marked by various terrorist attacks — particularly
in London — and volatile oil prices. [August 5, 2005] Representative John Boehner (R-Ohio), chairman of the House Education
and the Workforce Committee, recently introduced the Pension
Preservation and Portability Act, which would clarify that cash balance
and other hybrid plans do not violate age discrimination laws. [August 4, 2005] The proposed section 415 regulations clarify that terminated employees
may make elective deferrals only from specified forms of post-severance
compensation. [August 4, 2005] At its May meeting, the Financial Accounting Standards Board (FASB)
directed its staff to analyze how accounting for a defined benefit plan
that offers a lump sum payment option would be affected if the
accumulated benefit obligation (ABO) for each participant eligible for a
lump sum were required to at least equal the lump sum payable to the
participant as of the measurement date (the "walk-away benefit"). [August 4, 2005] China's "Enterprise Annuity" legislation has generated a good deal of interest since it was issued last year. But now the show really starts with the award of the first licenses to the financial institutions which will create the new pension fund industry. [August 3, 2005] The United States Congress recently approved 20,000 additional H-1B
visas, above the annual allotment of 65,000. [August 1, 2005] After months of speculation and political wrangling, Beijing recently announced a revaluation of the yuan and an end of its decade-old peg to the U.S. dollar. [August 1, 2005] Watson Wyatt & Company Holdings, a leading international human capital and financial management consulting firm, today announced the completion of the acquisition of assets and assumption of liabilities of European-based Watson Wyatt LLP, its long-time alliance partner. [August 1, 2005] The Choice of Funds regime commenced on 1 July 2005. By 29 July 2005, employers had to give a Standard Choice Form to all existing employees at 1 July 2005 who are eligible for Choice. [July 29, 2005] 'Portability', in the Australian context, refers to the ability of superannuation fund members to require the trustee of their fund to transfer all or part of their benefit to another complying fund of their choice. Portability was introduced with effect from 1 July 2004, but with limited application. On 15 June 2005, one of the key restrictions on the application of Portability was removed, with the change taking effect from 1 July 2005. [July 29, 2005] The Greek Parliament has now passed government legislation to create a single auxiliary pension fund for the banking sector, replacing the eleven such funds currently in existence. [July 28, 2005] The government is proposing a whole series of cuts in personal and business taxes, value added tax and social charges, to be implemented in stages between now and 2010. [July 28, 2005] Over 65 per cent of board members administering German foundations surveyed by Watson Wyatt believe that optimal exposure to equities should be below 25 per cent, with only 1 per cent believing that allocations should be above 50 per cent. [July 28, 2005] In March 2005, the government decided to withdraw the
low-cost, voluntary private pension plans, after consultations with
pension fund experts, industry players and Central Provident Fund (CPF) members. [July 28, 2005] Senate Finance Committee chair Charles Grassley (R-Iowa) and ranking member Max Baucus (D-Montana) released a new version of their National Employee Savings and Trust Equity Guarantee Act (NESTEG) on July 22, placing a stronger focus on defined benefit funding and related pension reform issues. [July 26, 2005] On June 1, 2005, Panama's Parliament approved a law to reform its social security system, however, due to pressure from opposition groups, the new measures will not be enacted for at least 90 days. [July 22, 2005] Congress approved in July 2005 a pension reform bill that eliminated certain monthly pension payments for Colombians and set dates to increase the country’s retirement age. Although the bill had been considered the most important economic reform sought by President Alvaro Uribe’s government, it was watered down during legislative consideration. Analysts expect that the next administration will have to introduce more reforms to combat the deficit in the social security system. [July 15, 2005] Italian employers need to address new laws affecting supplementary retirement schemes now in order to avoid unnecessary cost and administration when they come into effect next year. [July 14, 2005] The exposure to equities of many Additional Voluntary Contribution (AVC)
pension funds has continued to fall over the past year, according to a
survey by Watson Wyatt. [July 13, 2005] Pension funds globally invested over US$62bn in alternative asset
classes during 2004, comprising almost US$30bn in property, US$17bn in
private equity and US$16bn in fund of hedge funds (FoHFs), according to
a survey by Watson Wyatt in partnership with Global Investor magazine. [July 13, 2005] Chief executive officers at the largest U.S. companies received fewer
stock options again in 2005, although the value of their stock options
increased for the second consecutive year, according to a new analysis
by Watson Wyatt. [July 1, 2005] The rate at which large companies froze or terminated their defined benefit pension plans accelerated sharply last year even as the average funding level for plans continued to increase, according to a new analysis by Watson Wyatt. [June 22, 2005] Watson Wyatt LLP, the global consulting firm, and Actuaris, the Paris-based actuarial consulting and insurance and financial software firm, have agreed to form a strategic alliance. [June 21, 2005] Watson Wyatt's Benefits Report Europe and Employment Terms & Conditions Report Europe have been completely revised for the 2005 editions. [June 20, 2005] On June 9, 2005, the debate on the future of the Canadian health care system heated up with the release of the Supreme Court of Canada (SCC) decision in Chaoulli v. Quebec (Attorney General) (Chaoulli). [June 15, 2005] On May 24, the Régie des Rentes du Québec (Régie) released a Working Paper regarding the funding of defined benefit (DB) pension plans. [June 13, 2005] Most companies are taking an incremental, selective approach towards the outsourcing of their human resources functions, according to a new survey by Watson Wyatt. [June 3, 2005] The ERSA sets out broad principles for the establishment and management of employer-sponsored retirement plans as an alternative to the existing mandatory severance payment system. [June 1, 2005] Watson Wyatt Worldwide, a leading human capital consulting firm, has
appointed Simon Gilliat to head its International Consulting Group,
which focuses on providing employee reward and benefits consulting to
multinational organizations. [June 1, 2005] Last month, U.S. companies received two important - and mostly welcome - messages from the Securities and Exchange Commission (SEC) regarding the new stock option accounting rules under FAS Statement No. 123R. [June 1, 2005] Employers that provide cafeteria plans may now establish a two-and-one-half-month grace period for participant claims, under a new rule released by the IRS last month. [June 1, 2005] In Revenue Ruling 2005-24, the IRS authorizes tax-free employer contributions of accumulated unused vacation and sick leave to health reimbursement arrangements (HRAs) for retirees. [June 1, 2005] Congress moved one step closer to pension reform when House Education and the Workforce Committee chair John Boehner (R-Ohio) introduced the Pension Protection Act of 2005 (H.R.2830) on June 9, 2005. [June 1, 2005] The ruling Uri Party in South Korea has pledged to bring a bill to the National Assembly during the fall 2005 session that would help address the health care needs of the country's growing elderly population. [May 31, 2005] In the 2005 Budget speech presented to Parliament by the Minister of Finance on 19 May, the introduction of a new workplace savings plan was announced. ‘KiwiSaver’ accounts are intended to assist employees in saving for a first home deposit and in saving for retirement and will become available from 1 April 2007. [May 27, 2005] Among the provisions of the 2005 Finance Act, which became effective on 1 January 2005, is the introduction of a new legal and tax framework that will allow companies in France to grant free shares to their employees. The move provides an alternative to the discretionary employee share schemes, which were the only vehicles that were considered as qualified employee stock option plans. [May 25, 2005] On April 20, President Bush signed the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 into law. [May 23, 2005] In an effort to boost sales force productivity, U.S. employers are
raising the bar when it comes to performance goals and quotas, according
to a new survey by Watson Wyatt. [May 23, 2005] The Department of Fiscal Policy recently submitted a draft proposal to cabinet to establish the long awaited mandatory 'National Pension Fund'. The fund will require employer and employee to each contribute 3 percent of salary, and would be effective January 1, 2007. [May 19, 2005] The Ontario government tabled its 2005 Budget on May 11, 2005. Initiatives announced in the Budget to amend the Pension Benefits Act will be of particular interest to sponsors of multi-employer pension plans and pension plans with members in Ontario and Quebec. [May 18, 2005] Premiums that financially healthy companies pay to the Pension Benefit Guaranty Corporation (PBGC) for their defined benefit plans would increase by more than twice those of their weaker counterparts under the Bush administration's proposal to overhaul pension funding rules, according to a new analysis by Watson Wyatt. [May 17, 2005] India’s Finance Act 2005 introduces a new tax on employers for the financial year commencing 1 April 2005. [May 16, 2005] Watson Wyatt Worldwide announced it has opened its first office in Chile. [May 16, 2005] Over 60 per cent of FTSE 350 companies are yet to form a preliminary view on the pension plan design implications of the legislative changes of the Pension Act and the Finance Act beyond Lifetime Allowance issues, according to a survey by Watson Wyatt. [May 13, 2005] Along with significant personal income tax cuts, particularly for higher income earners, the Federal Budget included a number of measures affecting superannuation. [May 11, 2005] On May 5th, Quebec’s Minister of Employment and Social Solidarity introduced Bill 102, An Act respecting the funding of certain pension plans. The purpose of Bill 102 is to temporarily relax certain funding rules for defined benefit (DB) and hybrid pension plans. Given the number of Quebec-registered pension plans in solvency deficit (seven out of 10 by some estimates), the legislation may provide some welcome relief to plan sponsors. [May 11, 2005] Mexico's Commission for the Retirement Savings System (CONSAR), the governing board of its national retirement system recently approved several changes to help liberalize the system. [May 9, 2005] Cash allowances or UURBS are the most popular options being considered by companies as alternatives to pension benefits for executives likely to suffer the imposition of the Lifetime Allowance Charge, according to new research by Watson Wyatt. [May 6, 2005] Members of defined contribution (DC) pension schemes are considerably less aware of their likely income in retirement than defined benefit (DB) pension scheme members, according to new research from Watson Wyatt. [May 3, 2005] Supplemental employee pension plans (SERPs) are an important tool for Canadian employers who want to attract and retain managers and other highly-skilled employees. While the 2005 Federal Budget proposed increases in pension and RRSP limits, these increases were relatively modest, leaving Canadian limits on tax-deferred retirement savings well below those of the U.S. and the U.K. [May 2, 2005] In late March, the Deputy Commissioner of the Australian Taxation Office (ATO), Mark Jackson, gave a speech which provided some insights into how the ATO intends to administer Choice of Funds. [April 28, 2005] The United States' Securities and Exchange Commission (SEC) Chairman, William Donaldson and the European Union's Internal Market Commissioner, Charlie McCreevy met in Washington on April 21st for a U.S.-EU Financial Markets Regulatory Dialogue. [April 27, 2005] Congress has started public discussions about the administration’s pension reform proposal. The Senate Finance Committee, House Education and the Workforce Committee, and House Ways and Means Select Revenue Measures Subcommittee held hearings in March. In addition, the Senate Health, Education, Labor and Pensions and Finance Committees conducted a joint forum to discuss the future of the private pension system. [April 26, 2005] Women are taking less interest in, and have different attitudes to, their pension planning than men, according to research from Watson Wyatt. [April 26, 2005] The IRS has issued proposed amendments to the 401(k) and (m) regulations that would provide guidance on designated Roth contributions under Internal Revenue Code section 402A, added by the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA). [April 25, 2005] UK senior managers are the highest paid in Europe after Switzerland, according to a Watson Wyatt report looking at compensation trends across 17 Western European countries. [April 19, 2005] Watson Wyatt recently released preliminary results of the firm's fourth
Staying at Work survey. [April 14, 2005] Commenting on new figures from the Office for National Statistics showing that employers' contributions to self-administered pension schemes in 2004 were a record four and three quarter times as much as employees contributed, Stephen Yeo, a partner at Watson Wyatt commented:
"The cost of pensions has risen in recent years due to increasing longevity and lower expected investment returns. In 2004, employers increased their contributions by nearly a quarter compared with 2003. As a result, they paid four and three quarter times the amount paid by employees. This is a record ratio, comfortably exceeding the previous highest figure of four times in 2003." [April 13, 2005] The American Jobs Creation Act created a temporary tax benefit for companies that repatriate earnings of foreign subsidiaries and use the funds for specified purposes. [April 8, 2005] On February 4, a federal court in Pennsylvania blocked the Equal Employment Opportunity Commission (EEOC) from issuing its final rule on coordinating retiree medical benefits with Medicare. [April 8, 2005] In the recently released budget proposals, the Bush administration outlines pension funding reforms whose stated goals are twofold: to protect workers’ benefits and to avert a taxpayer bailout of the financially beleaguered Pension Benefit Guaranty Corporation (PBGC). [April 8, 2005] The percentage of Canadian Chief Financial Officers (CFOs) who believe that the pension underfunding crisis will persist has more than doubled since last year, according to preliminary survey findings released by The Conference Board of Canada and Watson Wyatt Worldwide. [April 4, 2005] Companies are being forced to stand behind their pension promises like never before, says Watson Wyatt. [April 4, 2005] The Australian Treasury has now released the final regulations in respect of the ‘Choice of Fund’ legislation. [March 30, 2005] Watson Wyatt, the global actuarial consultants, has carried out a survey of trends in public sector pension provision in 14 countries in Europe, North America and Asia. [March 30, 2005] Sales of impaired life annuities were 44 per cent higher in the fourth quarter compared with the first quarter of 2004 and comprised 19 per cent of all annuities sold in the open market in the UK, according to a survey by Watson Wyatt. [March 30, 2005] Hong Kong Accounting Standard 19 – Employee Benefits (HKAS 19), formerly known as SSAP 34, has recently adopted a number of changes made to the International Accounting Standard 19. This Bulletin summarizes these changes. [March 29, 2005] In a surprise move, the 2005 Canadian Federal Budget announced that the government plans to amend the Income Tax Act (ITA) to eliminate the foreign property rule (FPR), with effect from January 1, 2005. [March 25, 2005] Six months after passing the Labor Pension Act (LPA) into law, the Executive Yuan of Taiwan ratified the Enforcement Rules under the LPA (the Rules) on December 28, 2004. [March 24, 2005] It is a busy time for reviewing retirement benefits in Korea – Korea’s new Employee Retirement Savings Act (ERSA) has just passed. And now, the accounting standards which measure Korean companies’ retirement benefit costs and liabilities are under review, and may soon change. [March 22, 2005] The United States Internal Revenue Service (IRS) recently issued the official version of Form 8891, "U.S. Information Return for Beneficiaries of Certain Canadian Registered Retirement Plans." [March 22, 2005] On 17 March 2005, the EU Directorate General on Employment, Social Affairs and Equal opportunities issued a Green Paper entitled "Confronting demographic change: a new solidarity between the generations". [March 18, 2005] During February most equity markets showed positive results, stimulated mainly by macro and micro economically favourable news. [March 18, 2005] In March, the Pension Benefit Guaranty Corporation released final revised 4010 regulations. The new rules will affect plan sponsors that are subject to the reporting requirements of ERISA section 4010, which include many of the nation's largest plan sponsors and their subsidiaries. [March 18, 2005] A number of legislative developments that have taken place recently or are in the pipeline will have a bearing on benefit provision in Uzbekistan. [March 17, 2005] With health benefit costs still rising at double-digit rates, more U.S. employers are adopting health management and consumer-directed health care programs to help control costs, according to the 10th annual survey of large employers conducted by Watson Wyatt and the National Business Group on Health. [March 17, 2005] The Chancellor delivered his ninth, and possibly last, Spring Budget report on 16 March. With a general election tantalisingly close, there were predictably few unpleasant surprises, and some measures that might prove attractive to certain elements of the electorate. [March 16, 2005] The U.S. Departments of Labor, Treasury, and Health and Human Services recently issued final and proposed regulations on the portability provisions of the Health Insurance Portability and Accountability Act (HIPAA). [March 10, 2005] Companies now have a partial roadmap for implementing the changes made by new section 409A of the Internal Revenue Code, which was added by the American Jobs Creation Act of 2004. On January 10, 2005, the Department of the Treasury and the IRS issued Notice 2005-1, the first part of the comprehensive guidance on the new law planned for 2005. [March 4, 2005] The Government of India has proposed financial sector reforms designed to increase investment flexibility. [March 2, 2005] The Irish government has proposed amending its social welfare legislation to incorporate the European occupational pensions directive. [March 2, 2005] Watson Wyatt Worldwide released the following statement regarding the federal government’s decision to eliminate the 30 per cent foreign content limit on investments in Canadian pension plans and registered retirement savings plans (RRSPs). [February 28, 2005] The 2005 federal Budget is the first tabled by a minority government in twenty-five years. It contains something for practically everyone: tax cuts, higher retirement savings limits, elimination of foreign content restrictions for deferred-income plans, and funding for the environment and health care. [February 24, 2005] Increased pressure to disclose the full value of individual directors' remuneration packages may result from the introduction of a new international accounting standard, according to Watson Wyatt. [February 24, 2005] UK workers' attitudes towards senior management are significantly worse than those of their US counterparts, with less than a third expressing trust and confidence in their leaders, according to Watson Wyatt. [February 22, 2005] Pension liabilities represent over 30 per cent of the market capitalisation of a typical German company and around 20 per cent for typical UK and Japanese companies, according to Watson Wyatt’s Global Investment Review released today. [February 18, 2005] Unfunded public sector pension liabilities will be approximately £690 billion in March 2005, according to Watson Wyatt. [February 18, 2005] The in-the-money value of unexercised stock options for chief executive officers soared during 2004 as the stock market continued its rebound, according to estimates prepared by Watson Wyatt, a leading human capital consulting firm. [February 18, 2005] President Bush has released his budget proposal for fiscal year 2006. It includes more details on the administration’s defined benefit funding proposal and on previously released proposals relating to hybrid pension plans and retirement savings. [February 9, 2005] On 1 January 2005, the minimum wage in Mexico increased by an average of 4.05 percent across the country’s three wage zones. [February 4, 2005] As the United States considers reforms to its social security system, it has plenty of company. [February 2, 2005] On January 14, 2005, the Canadian Securities Administrators (CSA) released Notice 51-314 – Retirement Benefits Disclosure (Notice) which establishes new guidelines for "reporting issuers" who may, in the interests of greater transparency, be considering additional, voluntary disclosure of the value of retirement benefits. [February 1, 2005] Taiwan’s Council of Labor Affairs (CLA) has issued guidelines to clarify certain aspects of the country’s new pension scheme. [February 1, 2005] On 18 November 2004, the Pensions Bill received Royal Assent. [January 28, 2005] Pension deficits for UK companies were virtually unchanged at the end of 2004 compared to 2003 despite the improvement in equity markets in which most pension funds are primarily invested, according to Watson Wyatt estimates. [January 26, 2005] Growth of total institutional pension fund assets in 2004 in the 11 major markets, measured in local currencies, was just over 7% according to Watson Wyatt and assets now total US$15.3 trillion outstripping the previous high of US$13.7 trillion (2003). [January 26, 2005] For over six years, Danish employees have been required to contribute 1% of their income to a special pension account, the Særlig Pension (SP), although as a measure to stimulate the economy this has been suspended for 2004 and 2005. [January 26, 2005] The Canadian economy is expected to continue its moderately strong growth in 2005 and beyond, according to an annual survey of leading Canadian economists released January 18 by Watson Wyatt. [January 25, 2005] Canadian organizations are missing a significant opportunity to gain a competitive advantage through building productive engagement in the workforce, according to a new survey of employee attitudes by Watson Wyatt Canada. [January 25, 2005] Bob Charles and Phil Collins of Watson Wyatt’s regional Retirement Practice in Asia
Pacific discuss emerging reforms in supplementary retirement benefits within the region [January 21, 2005] On January 1, 2005, tax reforms took effect in Mexico that will impact business interests in the country. [January 21, 2005] The Department of Labor published new procedures in late December for its Permanent Foreign Labor Certification (PERM) program that will go into effect on March 28, 2005. [January 18, 2005] The solvency levels of Canada's corporate defined benefit (DB) pension plans improved, on average, by about 5 per cent over the course of 2004. [January 13, 2005] On 29 December 2004, South Korea passed a major piece of retirement savings legislation, which set out broad principles for the establishment and management of employer sponsored retirement plans. [January 12, 2005] Despite growing publicity, most U.S. workers have neither heard of health savings accounts (HSAs) nor understand how they work, according to a new survey by Watson Wyatt Worldwide. [January 11, 2005] Canadian organizations are shifting toward a more strategic and all-encompassing approach to rewarding employees, according to a new survey released by Watson Wyatt Canada. [January 11, 2005] There have been some significant changes to benefit plans in the past year. The maximum Workers’ Compensation wage loss benefits have changed in all jurisdictions, and the description of public, hospital and medical care benefits has been clarified in some provinces. [January 7, 2005] On December 10th 2004, Ontario filed Regulation 386/04, which amends several provisions of the province’s Pension Benefits Act Regulation. [January 5, 2005] In this new report, Watson Wyatt Worldwide reviews how Hong Kong companies account for the cost of providing retirement scheme benefits under Hong Kong Accounting Standard 19 - Employee Benefits ("HKAS 19", previously known as SSAP 34).
[January 4, 2005] On December 16, 2004, the U.S. Financial Accounting Standards Board (FASB) issued its final statement on FAS 123, requiring that companies expense the fair value of stock-based compensation, including stock options and employee stock purchase plans. [January 3, 2005] On 24 November 2004, Confindustria and Federmanager signed the agreement for the new industrial executives’ contract. [December 31, 2004] The Ministry of Human Resources has introduced a new training requirement for all new non-Malaysian employees. [December 30, 2004] The IRS has proposed regulations permitting phased retirement arrangements in qualified defined benefit or money purchase pension plans under specified conditions. [December 30, 2004] In a press release issued on 20 December 2004, the EU Commissioner with responsibility for Taxation and Customs, László Kovács, announced that the EU had decided act against Sweden in respect of its stance on the taxation of foreign pension funds. [December 30, 2004] On 23 December 2004, the Australian Accounting Standards Board (AASB) issued its revised Standard AASB 119 Employee Benefits, the Australian equivalent to International Accounting Standard 19 on employee benefits. [December 27, 2004] Bill 10, the Pension Benefits Amendment Act, has received both first and second reading in the Manitoba legislature. Although many of the planned amendments are aligned with changes already made by one or more pension standards jurisdictions and endorsed in the proposed CAPSA Model Law, a number of unique "made in Manitoba" solutions have been retained. [December 27, 2004] The Israeli pension scene is currently undergoing a period of significant change both in respect of the underlying pensions legislation and the tax framework for pension provision. [December 23, 2004] Following the consultation carried out earlier in 2004, the IASB published amendments to IAS 19, the international accounting standard for employee benefits on 16 December 2004. [December 16, 2004] U.S. workers' attitudes toward senior management rebounded strongly in the past two years, with more than one-half of workers now expressing confidence in their leaders, according to Watson Wyatt's WorkUSA® Survey. [December 16, 2004] U.S. CEOs as well as employees saw the value of their stock option awards decline by more than 40 percent between 2001 and 2003, according to an annual study by Watson Wyatt. [December 13, 2004] Watson Wyatt has recently received three prestigious awards from China STAFF, a division CCH publications in Greater China. The China STAFF awards are considered the highest recognition of the profession in Greater China. [December 10, 2004] The United States Congress approved a measure that increases the number of employees with H-1B visas that can be hired in 2005 from 65,000 to 85,000. The measure is part of a $388 billion spending bill signed into law by President Bush on December 8th. [December 10, 2004] The American Jobs Creation Act, signed into law on 22 October 2004, made sweeping changes to the rules governing non-qualified plans in the US. Now, most plans must change their timing of deferrals and distribution provisions. [December 8, 2004] Watson Wyatt LLP has prepared a brief summary of the points from the Chancellor's pre-Budget report that may affect the provision of retirement benefits. [December 7, 2004] The regulatory framework for pensions in the Netherlands is undergoing considerable change, which will culminate in the introduction of a new Pension Funds Act in 2006. The outline of the new Act was published by the Ministry of Social Affairs and Employment in February 2004, with further details on its implementation issued at the end of October. [November 30, 2004] Companies domiciled in Spain can choose either a company tax-qualified pension plan (CTQPP) or a group insurance policy (GIP) or a combination of both vehicles to fund their pension liabilities. The former vehicle (CTQPP) is more tax efficient than the latter (GIP). [November 24, 2004] The Isle of Man’s parliament, the Tynwald, recently approved the Retirement Benefits Schemes (Domestic Schemes) (General Administration) Regulations 2004. [November 23, 2004] The Budget for 2005, presented by the new Minister of Finance in October, contains a number of points that will affect the design and financing of employee benefits in Portugal. Although minor modifications may be introduced in the course of the Budget debate, it is likely that the proposals will pass through their legislative stages largely unchanged and take effect on 1 January 2005. [November 22, 2004] Many U.S. employers have revised their variable pay plans for non-executive workers in the past 12 months or plan to do so next year, according to the results of Watson Wyatt’s 2004/2005 Strategic Rewards Report. [November 19, 2004] Employees in the Asia-Pacific region, as a whole, have high levels of job satisfaction, according to a new study by Watson Wyatt. Nevertheless, these same workers have doubts about the leadership skills of their senior managers and are largely dissatisfied with their compensation and benefits programs. [November 19, 2004] On October 25, 2004, the Canadian Association of Pension Supervisory Authorities (CAPSA) released Guideline No. 4 - Pension Plan Governance Guidelines and Self-Assessment Questionnaire. A high level of industry compliance with these self-regulatory principles is likely to prevent regulators and politicians from imposing new and less flexible legislation or regulations. [November 12, 2004] A recent Supreme Court of Canada (SCC) ruling regarding the distribution of actuarial surplus in the event of a partial pension plan wind up will further weaken Canada’s already-troubled private-sector defined benefit (DB) pension system, according to a discussion paper released by Watson Wyatt Canada. [November 8, 2004] The Working Families Tax Relief Act of 2004 (the Act), which President Bush signed into law on October 4, changes the definition of a "dependent" under Section 152 of the Internal Revenue Code (IRC). [November 5, 2004] Ontario’s Ministry of Labor recently released “Providing Choice: A Consultation Paper on Ending Mandatory Retirement” and requested responses to the document. [November 4, 2004] On October 22, President Bush signed into law the American Jobs Creation Act of 2004, a sweeping revision of U.S. tax code that will primarily affect businesses, including how they regulate certain benefit plans. [November 1, 2004] On 1 October 2004, the pension funds regulatory authority (SPC - Superintendência de Previdência Complementar) issued Resolution (CGPC) number 13. [October 19, 2004] A new voluntary savings plan in India, the Senior Citizen’s Savings Scheme, was instituted in August. The scheme allows citizens aged 60 and over to invest in savings accounts. The plan is also open to certain individuals under age 60 who retire early from employment with savings but no regular pension. [October 19, 2004] In its October 13 meeting on equity-based compensation, the U.S. Financial Accounting Standards Board (FASB) tentatively decided to delay the effective date of the FAS 123 ruling by six months, to interim or annual periods beginning after June 15, 2005. [October 14, 2004] The first report of the Pensions Commission published on 12 October 2004 confirms that pensions provided through the workplace are likely to be favoured in its final recommendations. [October 14, 2004] Following extensive consultation with Member States, on 22 September 2004 the European Commission adopted a proposal, which when implemented will update certain aspects of the working time directive (Directive 2003/88/EC). [October 14, 2004] On October 4, 2004, President Bush signed the Working Families Tax Relief Act into law. The legislation primarily extends tax provisions previously passed by Congress in measures including the Economic Growth and Tax Relief Reconciliation Act of 2001 and the Job Creation and Worker Assistance Act of 2002. This is the President’s fourth tax cut in four years; it provides tax breaks mostly for individuals and families, but it also impacts businesses. [October 7, 2004] A new survey conducted jointly by Watson Wyatt Worldwide and WorldatWork has found that the number of multinational companies with centralized compensation structures is increasing. [October 5, 2004] On 26 August 2004, the Brazilian government issued a Presidential Decree (Medida Provisória n° 209/2004) specifying the tax treatment of mutual funds and new types of pension funds and insurance policies. This brief summary is about the changes on taxation for pension funds [September 27, 2004] Effective 1 January 2005, listed companies in Singapore will be mandated to charge an annual expense against their profit and loss accounts for their employee stock options and other stock incentive plans. [September 24, 2004] In a recent ruling by the Supreme Court in Argentina, Article 39 of the Workers’ Compensation law which exempts employers from civil responsibility from civil criminal negligence for damages suffered by their employees in occupational accidents and illnesses has been declared unconstitutional. [September 24, 2004] Total assets at the world’s largest pension funds grew by 19% to US$6.6 trillion during 2003, moving above the previous high of US$6.2 trillion reached in 2000, according to Watson Wyatt research [September 24, 2004] Under a regulation issued by the Ministry of Manpower on 26 April 2004, expatriate employees are now subject to making contributions to the social security scheme in Indonesia. [September 24, 2004] Watson Wyatt’s 2004 Survey of Accounting Assumptions for Non-U.S. Defined Benefit Plans is now available. This is the 15th annual survey of assumptions applied by major corporations for their defined benefits plans around the world. [September 22, 2004] Many employers are considering restructuring their death-in-service benefits in reaction to the single event limits imposed on group death-in-service contracts by insurers since the terrorist attacks of September 2001, according to David Cross, head of healthcare and risk consulting at Watson Wyatt [September 20, 2004] During the course of the summer 2004, a number of Bills have been approved by the Puerto Rico legislature which could affect retirement plans of companies with operations in Puerto Rico. [September 15, 2004] On 3 September, the US Department of Health and Human Services announced that Medicare Part B premiums would increase by 17% in 2005 to US$78.20 per month. The increase has prompted legislation from a group of Democrats in the House of Representatives and the Senate. [September 14, 2004] In 2005, Canadian employers will continue to offer modest salary increases and rely heavily on short-term incentive programs, according to the 2004 Annual Canadian Salary Survey by Watson Wyatt Worldwide [September 6, 2004] The proposals to simplify the taxation of occupational schemes present a challenge and an opportunity for employers in respect of provision of retirement benefits to their UK employees. There are also a number of implications for internationally mobile workers and overseas schemes currently operating with corresponding approval. [August 26, 2004] The first revision of the BVG, the Swiss Federal Law on Occupational Retirement, Survivors’ and Disability Pension Plans, passed both Houses of Parliament last autumn. After the January 2004 deadline for a public referendum passed without action, the Government made public its intent to enact legislation in three phases or packages. [August 18, 2004] On 29 July 2004, the Supreme Court of Canada (SCC) released its long-awaited decision in Monsanto Canada Inc. v. Ontario (Superintendent of Financial Services). In a widely-expected move, the SCC held that subsection 70(6) of Ontario’s Pension Benefits Act (PBA) requires the distribution of surplus on a partial pension plan wind up. The ruling did not address the question of to whom the surplus must be distributed. [August 16, 2004] Pension reforms have been on the Italian Government’s agenda for more than two years. A consultation document (delega previdenziale) issued by the Ministry of Welfare over two years ago proposed dealing with the issue of keeping people in employment by increasing the retirement age and by boosting private pension savings through the re-direction of TFR (trattamento di fine rapporto) as contributions to a pension fund. [August 13, 2004] In July, the Social Security Institution announced its plans for reform of social security pensions as part of the country's efforts to get to grips with the huge pension deficit. According to the World Bank and the IMF, this debt is unsustainable and the system must be reformed. [August 13, 2004] The legislation regulating the minimum wage level in the People’s Republic of China has recently been amended. A main thrust of the new regulations is to extend the field of application of the minimum wage to persons in part-time employment. [August 11, 2004] The adoption of the IAS19 accounting standard will be an important factor in the changes occurring in the European pensions landscape, according to Eric Steedman, a partner at Watson Wyatt. [August 10, 2004] On July 20, the House of Representatives approved the Stock Option Accounting Reform Act. In general, the act would require expensing of stock options granted to the top five executives of publicly-traded companies, but delay expensing for stock options granted to other employees. [July 30, 2004] With effect from 1 July 2004, the 3.5% tax on the salaries and wages fund was abolished. The Serbian Ministry of Finance has announced that this will produce savings of over 7 billion dinars by the end of the year and hopes that this will encourage companies to make new investments or raise salaries, depending on their individual business policies. According to the Ministry, private employers will be free to decide for themselves how these additional funds should be employed, while public companies will have to use them for new investments. [July 29, 2004] The government has previously attempted to reform this law but failed and in April and May of this year it has published two new proposals for consultation. [July 26, 2004] The European Commission (EC) has recently taken action against Belgium, Denmark, Ireland, Portugal and France to change their pension tax legislation in the past and now it seems Spain is to be taken to task for similar reasons. [July 22, 2004] On June 25, 2004, the Puerto Rico Senate approved House Bill 4746 without amendments. If signed into law by Governor Calderon, the bill would pave the way for employers in Puerto Rico to establish flexible benefits programs, also known as cafeteria plans. [July 20, 2004] The Nigerian Senate has recently approved a bill that would establish a new system of mandatory retirement savings accounts (under a new contributory Pension Scheme). The bill also covers abolishing many private sector retirement plans and the social security provident fund. [July 14, 2004] Over the past two years more than 50% of open final salary pension schemes were changed, but by no means all of those were closed and replaced by defined contribution schemes, according to a survey by consultants Watson Wyatt. Around 45% of those who changed either retained their final salary formula, but introduced higher employee contributions and/or reduced member benefits, or introduced some form of "risk-sharing" defined benefit scheme. [July 13, 2004] On 4 May 2004, the Romanian Parliament adopted a new law on private health insurance. The law, which will come into effect at the start of September this year, provides the framework for Romanians to supplement the medical coverage afforded by the mandatory State scheme that is not altered by the new law (ie people who take out private medical insurances will not be able to opt out of paying the mandatory contributions to the State health insurance system). [July 6, 2004] Amendments were made to the legislation on the surcharge and superannuation guarantee notional earnings base when it passed through Parliament in June. [July 1, 2004] A new pension law was passed by the German “Bundesrat” on 11 June 2004. This was the final legislative hurdle that had to be cleared before it could come into effect on 1 January 2005. The pension reform contains substantial tax changes that will affect state pensions, occupational pensions and private savings. [June 30, 2004] On 3 June, the government adopted a draft Law on privately managed pension funds. This law regulates the setting up, organisation and operation of a system of privately managed pension funds (second pillar). The law also lays out the responsibilities of the Commission for Pension Funds Supervision, as well as the guarantees given to the participants in the funds. [June 30, 2004] The Labor Pension Act ("LPA") was passed in mid June. Its implementation is set for July 2005. Companies have just a year to plan for the impact this new legislation will have on their retirement arrangements. [June 30, 2004] Draft legislation to introduce new pensions legislation in Taiwan has been in the debating stage in the Taiwanese Parliament for some considerable time. [June 16, 2004] The pension reform bill introduced earlier in February this year was passed by the House of Representatives (Lower Chamber) on 11 May; on 5 June the coalition government pushed the legislation through the House of Councilors (Upper Chamber), the final stage in order for it to become law. [June 11, 2004] A new voluntary DC pension system allows employers in China to provide retirement benefits tax efficiently. But with benefits costs in China already high by international standards, employers will need to take care that this new tax-break doesn’t lead to even higher costs. [May 17, 2004] The Spanish Government recently introduced measures to bring the operation of its domestic pension plans more into line with European Pension Fund Directive. A Royal Decree that encompasses some of the reforms required to meet the EU requirements was approved on 20 February 2004 and the Government have allowed a year for compliance, to coincide with the EU deadline. [May 11, 2004] On 30 June 2003, the Government published a consultation paper, 'Civil Partnership: a framework for the legal recognition of same-sex couples', which proposed the introduction of a civil partnership registration scheme under which same-sex couples in England and Wales would be able to register their relationship. The Government has now published a Bill for consideration by Parliament. [April 13, 2004] Slovakia is reforming its social security system to bring it into line with Western European structures. This process involves the introduction of three new acts originally scheduled to be introduced in 2003. To date only the social security act has been published which came into force on 1 January 2004. [April 8, 2004] In January 2004, the Canadian Association of Pension Supervisory Authorities released a discussion document containing proposals to synchronise the provincial and federal regulations applying to pension funds. At present, the nine Canadian provinces each has its own pension law and the federal government oversees plans for national employers such as banks and railways. [April 8, 2004] In late December 2003 the Government and the Knesset Financial Committee finalised plans for a mandatory funded pension plan to cover employees who do not have an occupational plan provided by their employer and self-employed individuals without a pension plan. [April 7, 2004] The Tax Laws Amendment (2004 Measures No. 2) Bill 2004 was introduced into the Australian parliament on 1 April 2004. It contains, amongst other things, changes to give effect to the announcement in September 2003 concerning the taxation of overseas superannuation payments. An overview of the proposed changes is given below. These measures do not become law until this bill passes through Parliament and receives Royal Assent. [April 5, 2004] Singapore’s Economic Review Committee made recommendations back in July 2002, for low cost privately-managed retirement plans to be provided under the Central Provident Fund (CPF). The CPF is a state run provident fund to cater for the retirement of citizens and permanent residents in Singapore. Since then the Government has announced that the actions taken to improve the situation for investors have not gone far enough in terms of securing a good return. [February 27, 2004] In late December 2003, President Luiz Inácio “Lula” da Silva of Brazil signed into law an amendment to Brazil’s constitution. The amendment affects all private-sector workers and has significant ramifications for many public-sector workers as well. [January 29, 2004] On 13 January 2004 the government appointed pensions commission published their proposals for pension reform, some of the main highlights are discussed below. The government appointed the commission to make recommendations that would provide for a financially stable, simplified system and one that will withstand the pressures of the ageing population. [January 20, 2004] In late December 2003, President Luiz Inácio "Lula" da Silva of Brazil signed into law an amendment to Brazil's constitution that affects all private-sector workers and has significant ramifications for many public-sector workers as well. [January 14, 2004] As part of his pre-Budget statement, the UK Chancellor announced the details of the second consultation on the Government's proposals to simplify the taxation of pension benefits. [December 22, 2003] A study group of experts headed by Professor Bert Rürup has published its recommendations this month for reforming various aspects of the social security system including pensions, health insurance and long-term care insurance. [October 13, 2003] The new law on occupational pensions has been introduced in Belgian Parliament and has been published in the Belgian official gazette of 15 May 2003. The new law reshapes the second pillar environment and adds some new elements, such as the industry-wide pension schemes, the social and ordinary schemes, the minimum return in case of DC plans, the contents of the pension statement. Special attention has been paid to the definition of the vested rights, the age related DC contributions and the individual pension promises. [September 30, 2003] In its Budget for 2004, the Dutch government announced that, as of 1 January 2005, the tax framework that encourages early retirement will be abolished with the removal of the tax breaks for early retirement. The Government’s aim is to raise labour participation, to restrain labour costs and to maintain an affordable pension system. [September 30, 2003] The European Commission is calling on social partners to play their role in tackling problems faced by workers who lose out on occupational pension rights when moving job, particularly to another Member State. [September 15, 2003] The Government and the opposition Democrat party in Australia have announced agreement on two of the components of the Government’s superannuation package presently held up in the Senate. [September 9, 2003] The French government approved the new Pension reform in July and it was published in the Official Journal 22 August 2003. The new law extends the length of contribution periods and working life in order to guarantee higher pension level. [August 31, 2003] There has been considerable legislative activity at the end of July and the start of August in relation to pensions, all in preparation for Poland’s accession to the European Union in May 2004. [August 15, 2003] On 31 July 2003, a U.S. Federal court ruled against IBM in a lawsuit that claimed that their pension plan violated age discrimination provisions of the Employee Retirement Income Security Act of 1974 (ERISA). [August 12, 2003] Under the 2003 Dutch Finance Act, provision has been made for a reduction in the maximum permitted annual accrual rate for defined benefit pension plans. [August 11, 2003] Like many of its European neighbours, Austria is facing difficulties in financing its social security pension system at its current level. In response to this problem, the Government has decided to reform the current benefits package, which also like its European neighbours has resulted in a general reduction in benefits. [August 8, 2003] Changes to the superannuation guarantee
system took effect from 1 July 2003, with
employers now required to make SG
contributions on at least a quarterly basis for
accumulation style funds. [July 28, 2003] Under the new Group Redundancies Act enacted on 13 March 2003, a new procedure is being introduced that employers will be required to follow with effect from 1 January 2004, if they wish to implement a group redundancy. [July 14, 2003] The European Court of Justice (ECJ) delivered its judgement in the Skandia case (C422/01) on 26 June 2003. [July 2, 2003] The UK Government has outlined its plans to address the 'pensions crisis' in the form of an 'Action Plan'. Reflecting widespread concern about losses experienced by members when pension plans wind up, the Government proposes a three-strand approach. [June 26, 2003] Following a 'yes' vote in March 2003 in favour of joining the European Union, Malta is due to achieve full EU membership in May 2004. [June 26, 2003] The Government has recently released for public comment draft portability regulations intended to facilitate the ability of members to transfer the withdrawal value of their superannuation benefit to the superannuation arrangement of their choice. [June 23, 2003] With approximately 40% of second pillar Swiss pension funds showing an underfunded position at the end of 2002, the government has recently proposed the following
[June 1, 2003] Under the new Group Redundancies Act enacted on 13 March 2003, a new procedure is being introduced that employers will be required to follow with effect from 1 January 2004, if they wish to implement a group redundancy. [June 1, 2003] On 28 May, the Financial Accounting Standards Board (FASB) staff met to consider the consensus reached by the Emerging Issues Task Force (EITF) on 15 May regarding three issues related to cash balance accounting. [May 29, 2003] A draft bill designed to reform the country’s pension system will soon be presented to Parliament for discussion. It is based on the Ministry of Labour's recommendation to switch from the traditional progressive pay-as-you-go system to one driven by personal pension accounts held with private asset-management companies. [May 20, 2003] The Spanish health insurance market has experienced sustained growth over the past decade. Compound annual growth between 1997 and 2001 totalled 9.8%, despite changes in personal taxation that removed fiscal benefit from health insurance in the late 1990s. At present, around 16% of the Spanish population have private health insurance. [May 1, 2003] Although over the last 50 years India has shown some improvements in its health infrastructure, it is at a far from satisfactory level. According to some estimates, India has less than 100 beds per 10,000 population which is in stark contrast to developed countries, where this ratio is much higher. [May 1, 2003] In its meeting on 13 May 2003, the Council of Finance Ministers agreed the wording approved by the European Parliament on 12 March 2003, and the Directive was duly adopted. Member States, therefore, have two years from the date that the Directive appears in the Official Journal to implement it. [May 1, 2003] On 31 March 2003, instruments of ratification were exchanged and a new double tax agreement between the UK and the US came into force. Under its terms, this treaty will apply to tax years in the US from 2004 and in the UK from 2003/04. [April 11, 2003] In March the Pensions & Insurance Supervisory Authority of the Netherlands PVK (Pensioen- & Verzekeringskamer) issued a White Paper on annual solvency testing. This White Paper is a discussion memorandum, not a statement of official policy. It outlines a methodology designed to fit in the PVK’s new Financial Assessment Framework for pension funds and insurance companies, to be introduced by 2006. [April 9, 2003] In December 2002, the Minister of Finance issued five new decrees governing pension funds. These decrees, numbered 509 to 513, have been introduced with the aim of strengthening the financial position of pension funds.
[March 17, 2003] German social security is once again, or rather, still in financial difficulties. The difficult economic situation and its associated high unemployment, together with the underlying demographic problem have combined to produce a further major crisis. [March 1, 2003] 2002 was a busy legislative year for pensions, with a number of developments that significantly affect pension plans either directly or indirectly. [March 1, 2003] A preliminary summary of Watson Wyatt's Portuguese pension fund investment performance survey (SEMP)for the fourth quarter of 2002 has recently been published. [February 28, 2003] The EU Commission adopted on 17 February a Communication which sets out a detailed roadmap for the progressive replacement of the current forms (E111, E128, etc) by a single, personalised card European Health Insurance Card. The launch date is foreseen for 1 June 2004. The Commission has adopted these proposals at the request of the Barcelona Spring Summit of March 2002. [February 24, 2003] From 1 March 2003 the employers social security monthly rate will increase from 5.07 percent to 6.06 percent , the first adjustment in the contribution rate made in more than 20 years. [February 1, 2003] The IRS annual cost-of-living and statutory adjustments of various dollar limits for employee benefit plans for 2003 are set out below. [January 30, 2003] Our December Pensions News Flash considered the broad thrust of the Inland Revenue's proposals for the simplification of the tax rules for pensions. One of the major areas affected is that of executive benefit provision. If the proposals are implemented as drafted, almost every company will need to review its senior executives' pension arrangements. We expect most companies to have cause to take some action. [January 15, 2003] On May 18, 2001, the President of the Dominican Republic approved Law Number 87-01 to reform the country's social security system. As part of the reform initiative, the law established requirements for private pension plans. Article 108(i) of Law Number 87-01 made the Pensions Superintendent responsible for regulating, controlling and supervising existing pension funds. [December 10, 2002] On 20 November, the new double taxation convention between the United States and the United Kingdom dated 24 July 2001 for the avoidance of double taxation and the prevention of tax evasion obtained the Royal assent in the United Kingdom. [December 3, 2002] The Insurance and Pensions Authority has issued a consultative document on regulations subordinate to the Retirement Benefits Schemes Act 2000 (the Act). [December 2, 2002] Share options are currently taxed according to their value on the first date on which they are exercised; this means that if the shares decline after that date, the employees may actually find themselves in a position where they lose money. [December 1, 2002] In October, Watson Wyatt reported on a letter from the Dutch supervisory authority (PVK) to pension funds on measures to restore the financial stability of the pension system. One of the PVK's recommendations was that if a pension fund's funded ratio falls below 100%, the fund would have to take step to rectify the situation within a year. [December 1, 2002] In an economic slowdown, keeping
key employees engaged and motivated
is a challenge. To re-establish the
trust and commitment of your most
valuable employees, you need a
tailored reward and recognition programme - one that motivates and
retains top performers. [November 8, 2002] Watson Wyatt, in conjunction with
European Pensions News, have
published the results of their recent
pensions survey of European
multinational companies. [November 8, 2002] When planning for a salary review
in a number of countries, companies
need data on current and expected
rate of inflation, rate of salary
increases for different employee
levels, and key trends in
compensation, benefits practice
or employment legislation in each country. [November 8, 2002] The European Council of Finance Ministers have adopted a ‘common position’ on the proposed IORP Directive (commonly referred to as the Pension Fund Directive) and formally passed it last week to the European Parliament. The European Parliament has 3-4 months to complete its second reading, and either accept/reject the common position or seek amendments. If there are amendments, the Directive would be passed back to the Council for a second reading. [November 1, 2002] It is clear to everyone that the business world will not be the same in the wake of the crises at Enron and WorldCom. Now formal notice about changes in behaviour and culture in large American corporations is arriving in Brazil. During a recent visit to Brazil, Bob Wesselkamper, director of Watson Wyatt's international consulting practice, gave an interview in which he outlined the changes in culture and behaviour that are being experienced at US headquarters and gave an insight into the likely impact of the post-Enron changes will have in Brazil. [November 1, 2002] During October, the Advocate General released opinions on two cases (Müller-Fauré and Van Riet) where Dutch nationals had obtained medical treatment outside the Netherlands without obtaining 'prior approval' from the Dutch health authorities and had sought reimbursement of the costs incurred. [November 1, 2002] After a lengthy and at times acrimonious public debate, the Federal Council has now confirmed its decision to decrease the BVG/LPP minimum interest rate from 4% to 3.25%. This change will take effect as from 1 January 2003.
[October 31, 2002] The Argentinean government is currently reviewing the withholding rates that are paid by employees who contribute to the "Regimen Jubilatorio de Capitalización". [October 30, 2002] Alecta released the following press release at 28 October 2002 [October 28, 2002] The Ministry of Finance is preparing a white paper on how to reform the "special pension savings" to individual accounts. Individuals pay 1% of their salaries into a public fund administered by the Danish Labour Market Supplementary Pension Fund, ATP. [October 24, 2002] On 9 October 2002, the PVK (the Pensions and Insurance Supervisory Authority of the Netherlands) sent a letter to all Dutch pension funds on the criteria to be used for assessing their financial position. [October 21, 2002] Turkey has passed a new law relating to job security, which will make termination without just cause much more difficult. According to the new law, the termination of an open-ended contract of an employee with at least 6 months service, for companies employing at least 10 or more employees has to be based on acceptable reasons. These can include, for example, inefficient performance or the unethical behaviour of an employee of the company or other business requirements. [October 15, 2002] A new law on occupational pensions has been introduced in Belgian Parliament and is expected to go into force soon. The new law will reshape the second pillar environment and add some new elements, such as the sector pension schemes, the social and ordinary schemes, the minimum return in case of DC plans, the contents of the pension statement. Special attention will be paid to the definition of the vested rights, the age related DC contributions and the individual pension promises. [October 14, 2002] Alecta, the insurer to ITP in Sweden which covers 600,000+ employees, announced at the beginning of October 2002 that companies will no longer be able to use any remaining part of the surplus that was previously allocated to them. This is a temporary decision, and Alecta may reverse it in the future. [October 10, 2002] With effect from 15 September 2002 employees aged 45 or older with a minimum of one years service are entitled to an outplacement service prior to becoming unemployed. [October 9, 2002] India has experienced significant reductions in interest rates in the past year along with the world's other economies. The effects of these reductions cannot bypass retirement benefit plans. New investments are expected to earn a much lower yield than that currently being earned from funds already invested. [September 30, 2002] Following the general election in May, as part of a cost-cutting exercise, the new right-wing government is proposing a series of measures that will significantly alter the existing tax incentives available to employees. [August 16, 2002] Over two years ago, the European Commission published the first draft of a Directive on the supervision of pension funds, with the aim of facilitating the operation of pan-European pension schemes. After considerable debate, the Council of Ministers has finally reached political agreement on the wording of the draft Directive. [August 8, 2002] As a result of an amendment to the Japanese commercial code that became effective on 1 April 2002, a stock option system has become a reality in Japan. [August 8, 2002] One of the major changes in the 2001 German Pension Reforms was the mandate for all employers to offer their employees salary deferral plans (Entgeltumwandlung). [July 23, 2002] [July 22, 2002] The Economic Review Committee (ERC) has released its recommendations of changes in the Central Provident Fund (CPF) System in Singapore. The CPF is a state run provident fund to cater for the retirement of citizens and permanent residents in Singapore. [July 19, 2002] A bill introducing changes to the pensions legislation has been put before Parliament this month, to reform the increasingly over stretched social security system. [June 24, 2002] Egyptian officials have now issued a new law after a long period of deliberation, which is based on the International Labour Organisation (ILO) model. [June 24, 2002] The seven agreements will among other things help to remove some of the barriers on labour, land and air transport. The series of accords was approved in a referendum in May 2000 by the Swiss but final ratification by each Member State was only completed in April. [June 11, 2002] A political agreement was reached during the Council of Economics and Finance Ministers (3-4 June) on the Proposed Directive on Institutions for Occupational Retirement Provisions, which had been put forward by the Commission in October 2000. [June 6, 2002] Pension experts have advised the Government of the need to encourage companies to better protect their workers by setting up retirement plans in addition to the Mandatory Provident Fund (MPF). [June 6, 2002] The Spanish Presidency has suggested a compromise solution, which has the backing of the Association of British Insurers. [May 3, 2002] The new pensions act came into force on 28 March, which creates a new tax-favoured investment vehicle for individuals called Personal Retirement Savings Account (PRSA). [April 30, 2002] Tax harmonisation is crucial to the effective operation of pan-European pension schemes. However, the European Commission has conceded that it would be futile to attempt to harmonise the tax treatment of Member States' pension systems through new legislation. This would need the unanimous agreement of all Member States and, in relation to such sensitive matters, would not be achievable. [April 11, 2002] we disagree with Redovisningsrådet's conclusion that ITP should be classified as a defined contribution plan when it is insured with Alecta. [April 9, 2002] Despite falling stock market values, pension fund assets are still higher than at the start of 1999. [April 4, 2002] The labour law came into effect as of 1 February 2002, the code targets all foreign nationals working in Russia, including those in offices of foreign countries, except those exempted by particular rules under international agreements. The labour code specifically applies to chief executives (general directors) and other top management. [April 1, 2002] The EU member states have now formally adopted the directive on employee information and consultation rights in non-international companies with 50 or more staff. [March 26, 2002] The decision by the Karlsruhe constitutional court puts an end to the 22 year long debate concerning Germany's twin-track first pillar pension scheme. The court ruled in favour of a civil servant, who was dissatisfied that he was obliged to pay tax on his pension income while other citizens making contributions to the standard first pillar pension are not, they are obliged to pay tax on contributions. [March 22, 2002] Latin America/Caribbean - Argentina: New Scenario After enduring four years of economic crisis, Argentina's situation recently got worse when public demonstrations and an institutional emergency led former President Fernando De La Rúa to resign, resulting in five presidents in a two-week period. [March 21, 2002] In February 2002 Watson Wyatt Switzerland organized a one day Forum in Lausanne on attracting and retaining talent. [March 12, 2002] The Swiss Government drafted a proposal for revision of the BVG on 3 March 2000. In the meantime a subcomittee of the Commission “Social Security and Health” of the National Council (lower chamber of parliament) has worked out an alternative proposal. [March 4, 2002] Law #3 of March 13, 1942, as amended, regulates maternity benefits and the rights of working mothers in Puerto Rico. This current law provides for paid leave and job protection during maternity leave. Various bills that would affect this law are working their way through the legislature, and will be the subjects of public hearings in March 2002. [March 4, 2002] Regulatory authorities in Chile have recently promulgated new rules for the operation of voluntary savings within the social security system. The regulations apply to contributions made by workers to an AFP on an individual voluntary basis, or as part of a discretionary employer plan. The new rules became effective March 1, 2002. [March 1, 2002] On 13 February 2002, the EU Commission adopted an action plan to remove obstacles to EU workers’ mobility between jobs and between countries by 2005. [February 19, 2002] In 2001, the Hong Kong Society of Accountants (HKSA) issued an exposure draft on a proposed new standard for accounting practice for employee benefit (SAP-EB). [February 19, 2002] On the 19 February 2002, a law (DL 35/2002) was published that significantly alters the benefits payable by the state social security scheme. [February 1, 2002] The final text of the directive was agreed at meeting between the European Parliament and the Council of Ministers 17 December 2001. [January 29, 2002] During the week of December 3rd the Brazilian Chamber of Deputies approved a bill to modify the nation's labor laws. [December 3, 2001] Included among various measures taken by the Argentine government on November 1, 2001 to reactivate the economy, is one to immediately aid workers within the formal sector of the economy. It consists of a reduction in Social Security old-age contributions. The reduction is 6 percent of pay, and will last for one year -- but is renewable for one year more. [November 1, 2001] With effect from June 1, 2001 Decree 677/01 establishes new rules for the Argentine capital markets, including provisions affecting employee stock based compensation and benefits. [October 1, 2001] For years pension funds and the Brazilian government have disagreed on the legality of government tax claims on pension fund investment returns. With tax claims tied up in courts, the pension funds have avoided paying the taxes while the government has been persistent in its claim that taxes are owed. [October 1, 2001] Chile's Congress approved a bill to reform the country's labor code, due to become effective by the end of September 2001. [September 11, 2001] The Zimbabwean government announced recently that with immediate effect it is to start entering the requirement for insurers and pension fund to invest 45% of their assets in low yielding government bonds. [September 1, 2001] On 27 June 2001, the President signed the Economic Growth and Tax Relief Reconciliation Act. [August 1, 2001] On 3 August, the Minister for the Interior announced the draft of a comprehensive, new immigration law which if adopted, will provide increased incentives for the immigration of skilled workers and also tighten up on illegal migration and asylum. [August 1, 2001] On 2 August 2001, a new law on fixed-term contracts became effective. A main objective of the law, which is in line with the EU Directive on fixed-term employment, is to curtail the practice of using successive fixed term contracts in lieu of engaging employees on a permanent basis. [August 1, 2001] Over the last several years there has been some trend among mainly large pension funds to treat elgilibility for survivors benefits for long-term partners as being equivalent to that for spouses. [August 1, 2001] Alecta (formerly SPP), the quasi-monopoly insurer of the nation-wide white collar ITP pension arrangement, started to distribute some SEK 75bn (EUR 8bn) of its substantial surplus among its customers in August 2000. [August 1, 2001] In July, the EU Commission issued a Communication highlighting its concern over the sustainability of pension provision, primarily from Member States. [July 1, 2001] The U.S. Equal Employment Opportunity Commission (EEOC) opened an area office in San Juan, Puerto Rico on Monday, July 30, 2001. [July 1, 2001] Pension funds in Switzerland will be subject to stamp duty on all stock market transactions after 1 July 2001. In addition, pension funds with assets of at least CHF 10 m in securities will be henceforth treated as security dealers (Effektenhändler/commerçant de titres) and thus be forced to register as such with the tax authorities and fulfill a number of administrative requirements. [June 1, 2001] On May 9, 2001 the President of the Dominican Republic signed Social Security Law Number 87. The law covers old age, survivor and disability income benefits, as well as health care, and workers compensation. [June 1, 2001] The government has decided to withdraw the proposals for state pension reforms due to the mounting opposition from the political opposition parties and a revolt by some of its own deputies. [June 1, 2001] Long-awaited legislation establishing 401(k)-type retirement plans has finally passed into law to take effect on 1 October. In June, legislators passed major pension reform for existing corporate retirement programs which will require greater oversight and minimum funding requirements beginning next April. [June 1, 2001] According to Prime Minister Costas Simitis the prime objective of the government's plan announced this month to reform the country's ailing pension system is to secure its viability over the next twenty years ahead and to retain its social identity and reduce deficits. [May 1, 2001] The median performance of Swiss pension funds in 2000 was 1.5%, according to the ASIP / Watson Wyatt performance comparison. The performance of the first quarter of 2001 was negative for many funds, and thus investment returns will likely fall well short of those required to fund the growth in liabilities. [May 1, 2001] On 12 April 2001, the Minister for Social, Community and Family Affairs announced details of the PRSA (Personal Retirement Savings Account) framework, which will form a significant component of the forthcoming Pensions Bill. [May 1, 2001] The reform plan was approved by the German Parliament on 11 May 2001, which will encourage the introduction of private pension schemes. [May 1, 2001] The employees compulsory contribution to the Employee Provident Fund (EPF) has been cut by 2% as part of a Government package to counter the negative effects of the slowdown in the US economy. [May 1, 2001] The Mexican authorities are thought likely to permit pension funds (Afores) to invest between 5% and 15% of managed assets in shares as of June 2001 in a bid to improve the Mexican stock markets liquidity. [May 1, 2001] The bill which will introduce 401(k) style defined contribution pension plans is set to pass the current Diet (Japanese Parliament) session in June and could become effective by October. [May 1, 2001] The Brazilian regulatory agency for Closed Pension Funds, the SPC, issued a new rule on March 23, 2001, Portaria 843. The rule established requirements for periodic actuarial audits of the Pension Funds. Fund sponsors, administrators and consultants campaigned for modifications to Portaria 843 for various reasons, including concern that its implementation was excessively burdensome. [May 1, 2001] Das von der Eidg. Steuerverwaltung erlassene Kreisschreiben hat sich in der praktischen Anwendung als zu kompliziert erwiesen. [May 1, 2001] "The Spanish government, the employers confederation and the CC OO trade union have signed a new four-year agreement on social security on 9 April. [May 1, 2001] European Commissioner, Fritz Bolkestein, confirmed to the European Parliament yesterday (Monday 2 April) that it is unlikely that a directive on cross-border tax issues for pension funds will be issued, instead a communication on the subject will be issued within the next two weeks. [April 1, 2001] A new pension bill, the Barbados Pension Benefits bill and draft regulations, is under consideration in the Barbados legislature. [April 1, 2001] According to a new rule, Portaria 843, published on March 23, 2001, Brazilian
closed entity benefit funds must carry out a biannual third-party actuarial
audit. Under special circumstances more frequent audits may be required. The
new requirement applies to both public and private sector employee benefit funds. [March 1, 2001] After extensive negotiations between government and both sides of industry the 'Pension Funds Second Amendment Bill, 2001' has now been published in the government gazette. [March 1, 2001] The pension reform bill introduced this month in the House of Representatives has received support from the congress and from the public, is now a step further along the way to becoming law. The Portman-Cardin bill similar to the previous bill introduced during the last congressional session, aims to improve on the benefits available through pension plans and reduce the administrative overload associated with plan administration. [March 1, 2001] On 31 January 2001, the Ministry of Finance announced that Singaporeans will be able to start contributing to a tax-favoured Supplementary Retirement Schemes (SRS) from April 2001. The SRS was first announced by the Finance Minister in his 2000 budget speech in response to recommendations made by a government panel in November 1999. [March 1, 2001] The Inland Revenue has issued a note giving details of the forthcoming social security Agreement between the United Kingdom (including Guernsey, Jersey and the Isle of Man) and Japan that came into force on 1 February 2001. The main purpose of the Agreement is to ensure that an individual is not liable to pay social security contributions for pension purposes to both countries' schemes at the same time. [February 1, 2001] Under the prior administration legislation was created to privatize old age income, health insurance, and other Social Security benefits along the lines of systems in operation in Chile and Colombia. With the election of current President Chávez and the adoption of a new Constitution, the prior administrations Social Security reform was blocked. Now, after weeks of analysis and debate, the direction reform is taking is becoming increasingly clear. [February 1, 2001] The new Social Security Law will require employers to review their original pension plan design approach. [January 1, 2001] The Income Tax Act 2001 and several related bills came into effect on 1 January 2001 which have removed the pension accrual obstacles for migrating employees and the retention of Dutch tax claims/prevention of alleged abuse. [January 1, 2001] For the second consecutive year, the value of the AGIRC point which is used in calculating the level of complementary pensions remains unchanged in 2001 at FF2.3586. [January 1, 2001] The SPC ("Secretaria de Previdência Complementar" - Brazilian Private Pensions Regulatory Body under the Ministry of Social Security) promulgated a ruling on January 10, 2001 regarding the minimum retirement age under a private plan for "integral retirement". [January 1, 2001] The new Social Security Law came along with a wide gap on salary cap for Social Security purposes. In 1997, Mexican Social Security Law migrated from a DB scheme to a DC one. [January 1, 2001] Many states have mental health legislation that accompanies federal legislation. Now, too, the Commonwealth of Puerto Rico implemented a new mental health law. In January 2001 Law Number 408 of October 3, 2000 went into effect in Puerto Rico, regulating many facets of mental illness issues. [January 1, 2001] To correct a problem created by prior US Internal Revenue Service regulation concerning the definition of a domestic trust that left unclear the treatment of Puerto Rico retirement plans, the IRS has proposed a new regulation. [December 10, 2000] In case of divorce, the amount of the vested benefit accrued during the marriage has to be split equally between spouses. If both spouses are entitled to a vested benefit, only the difference will be split and transferred. [December 1, 2000] The Accounting Standards Board (ASB) has just published the new accounting standard as to how the cost of providing retirement benefits should be reflected in company accounts. The new standard will be fully effective for accounting periods ending on or after 22 June 2003, although companies will be required to make additional disclosures from 22 June 2001. [December 1, 2000] A new code of behaviour for Swiss pension funds and related organisations, including their advisors, has been published. The new rules seek to provide a mechanism for ensuring that individuals or companies involved in the investment management of pension funds do not derive any personal benefit through insider knowledge.
[December 1, 2000] On 28 November 2000, the Spanish government announced the extension of the deadline for the conversion of unfunded pension promises to approved funded plans. [December 1, 2000] In December, the Japanese parliament (Diet) enacted a law revising the medical care system with a view to containing rising medical costs for the elderly. The revised system, which will come into force on 1 January 2001, will oblige patients aged 70 and over and bed-ridden patients aged 65 and over to pay 10% of their medical costs. [December 1, 2000] In November, the Ministry of Labour submitted a Bill to Parliament which if it becomes law is intended to make the labour market more flexible and responsive to the needs of the modern economy. [December 1, 2000] On 20 December 2000, the upper house of the German parliament, the Bundesrat, approved legislation that enshrines the right of employees to work on a part-time basis. The new law, that comes into force on 1 January 2001 will apply to all organisations with over fifteen employees. [December 1, 2000] On 15 December 2000, the Government announced it is scaling back on the proposed cuts in benefits to the pay-as-you-go pension system. This was in response to strong pressure from German trades unions. [December 1, 2000] A progress report to the ECOFIN Council on the impact of ageing populations on public pension systems was published on Monday 6 November. In February, earlier this year ECOFIN (Economic and Financial Council of Ministers) asked the Economic Policy Committee (EPC) to prepare a first progress report on the impact of ageing populations on public pension systems by December 2000. [November 1, 2000] The long-awaited EVK2000 mortality and disability tables for valuing pension benefits are now available. The tables are based on experience from the Eidgenössische Versicherungskasse (EVK), or Federal Civil Servants Pension Fund, over the period 1993-98.
[November 1, 2000] The IRS has proposed regulations clarifying the characterization of qualified plan trusts as domestic trusts. The proposal corrects problems created by previous regulations (see Watson Wyatt Insider, December 1999), providing relief for plans sponsored by multinational employers and for Puerto Rican plans. [November 1, 2000] In October's budget, the Austrian Finance Minister announced plans to promote share ownership which is currently significantly lower in Austria than in other EU member states (3% of employees compared with 10% in the EU as a whole). These measures are being introduced in advance of the upcoming round of privatisations starting with Telekom Austria. [November 1, 2000] The Thai government is to allow for the USD2.1 billion Social Security Fund to invest internationally for the first time, when it outsources a portion of its assets—also a first. Furthermore the country's THB200 billion (USD4.6 billion) worth of voluntary corporate pension fund is also to be allowed to invest internationally within the next two years. [November 1, 2000] A progress report to the ECOFIN Council on the impact of ageing populations on public pension systems was published on Monday 6 November. [November 1, 2000] The Swiss Pension Fund Association (ASIP) and Watson Wyatt are pleased to announce the results of the first edition of the ASIP/Watson Wyatt Performance Comparison, a survey of investment performance among Swiss pension funds. [October 1, 2000] The Singapore government announced on 11 October 2000 that the employer's CPF contribution rate is to increase by 4 percentage points to 16% with effect from 1 January 2001. [October 1, 2000] There is still high sensitivity regarding switching plan designs in pension plans in the US. The cash-balance press over the last year has created an environment of increased scrutiny by employees regarding major plan design changes and employers are more likely to keep discussions of plan design changes confidential internally. [October 1, 2000] Latin America/Caribbean - Argentina: Severance Payments Congress has enacted a law that became effective on 12 October 2000 which doubles the severance payment for dismissals to any employee who is not registered in accordance with labour laws. [October 1, 2000] Three years since its original Green Paper, and after lengthy consultation, the European Commission has published a draft Directive, intended to establish a common system of regulation of occupational pension schemes. In so doing, it also takes the first tentative steps towards permitting pan-European occupational pension schemes. [October 1, 2000] Effective October 12, 2000 the Argentine Congress enacted Law # 25.323, which doubles the mandatory severance payment for employee dismissals in cases of employees not registered as regular employees. Regular employees are employees that the employer registers as such with the labor ministry and certain other government agencies. [October 1, 2000] In a move designed to increase maternity leave benefits for working mothers in the private sector, Puerto Rico's Governor signed Law 425 dated October 28, 2000. The new law establishes the employer obligation to pay 100% of the working mother's salary during the maternity leave period. The salary payable under the law is based on the average wage earned during the 6 months preceding maternity leave. [October 1, 2000] In June 2000, the Taiwan legislature passed two bills relating to working time. Under the Labor Standards Law ("LSL") the legal maximum working time is being changed from 48 hours per week to 84 hours every two weeks, effective from year 2001. [September 1, 2000] The Government is close to gaining political support to implement a proposal to pre-fund the state pension. The proposal has been modified to accommodate concerns of the coalition partners the Alliance and the Greens. [September 1, 2000] After a lengthy consultation period, Parliament approved a new basic law No 17/2000 in July, which outlines new principles for the country's social security system. The main objectives of this revised system are to improve levels of protection, manage the system more efficiently and guarantee its financial sustainability. [September 1, 2000] The main opposition parties indicated that they would not block plans by Gerhard Schroder the Chancellor, to supplement the long suffering pay-as-you-go system with private pensions. If the proposals are implemented, these together with the recent tax changes will signify that Mr Schroder has been successful in securing fundamental structural reforms. [September 1, 2000] This joint Department of Social Security (DSS) and Treasury consultation paper was issued on 14 September 2000 and announced a wide-ranging review of the Minimum Funding Requirement (MFR) under UK occupational pension plans. [September 1, 2000] Susep, the government agency that oversees the private pension plan industry, is drawing up plans for two new retirement models to address certain shortcomings of other existing plans. Susep oversees retirement plans of the open entity type used by individuals and corporations, and operated by insurance companies that manage commingled, unallocated assets. [September 1, 2000] The chairman of the influential trade association the 'Wirtschaftskammer', has called upon the Government to introduce a thorough overhaul of the system on dismissal payments which would involve transition to a funded system. [September 1, 2000] The Part-Time Workers’ (Prevention of Less Favourable Treatment) Regulations have come into force (effective from 1 July 2000) and clearly set out the rules for the treatment of part-timers. All UK-based operations are covered by this legislation. [September 1, 2000] The government is coming under pressure from unions and employers in Spain to extend the deadline for externalising pension liabilities beyond 1 January 2001. [September 1, 2000] As one of many tools to combat inflation and turn around its economy, Ecuador is implementing the US dollar as the national currency. The dollar will be the single currency used to price consumer goods, contracts and workers' salaries. [September 1, 2000] On 1 August, the French government approved proposals to introduce a law which will allow employees to subscribe to new voluntary tax-favoured savings vehicle to be known as 'plan partenarial d'épargne salariale volontaire' (PPESVs). This vehicle is in addition to the already existing 'plan d'épargne entreprise' (PEE), but is being structured to make it more attractive to today's more mobile employees, allowing them to transfer accumulated savings without penalty to a new employer's arrangement. [August 1, 2000] Reforms to Estonia's state pension system (the first pillar) which were introduced in 1998 came into force on 1 April 2000. They form part of a wider modification that among other things will equalise male and female retirement ages by 2016. [August 1, 2000] The Regulation of Investigatory Powers Act (RIP), originated by Home Secretary, Jack Straw, and given royal assent on 28 July 2000, sets out the government's plans to allow official surveillance of internet traffic. RIP gives police and security services new powers to monitor and intercept e-mails and web sites. [August 1, 2000] On 5 July 2000, despite string opposition from trade unions, the lower house of the Austrian federal parliament approved the government's controversial plans to raise the retirement age under the state pension system. [August 1, 2000] The International Accounting Standards Committee has issued Exposure Draft 67, which if implemented will make certain limited amendments to IAS19, the international standard on accounting for employment benefit costs. [August 1, 2000] Watson Wyatt Brans & Co has established an International Practice in the Netherlands to work with Dutch multinationals and European headquarters on their international HR and benefits issues. [August 1, 2000] A bill known as the Comprehensive Retirement Security Act that would change the current laws governing existing pension plans, has cleared the Ways and Means Committee and passed to full Congress, where a vote is expected sometime this month. In general, the reforms would boost contribution limits for individuals and relax certain administrative rules and non-discrimination tests for sponsors of retirement plans. [July 1, 2000] Under the new program, employees will be able to exclude from taxable income up to 50% of the gains they realise on stock options granted on or after 1 June 2000. [July 1, 2000] In June, Taiwan Legislature reached a principle agreement to enforce a National Pension Scheme ("NPS") in year 2001. NPS is intended to provide benefit to all citizens age 65 and above. Citizens age 25 to 64 will be mandatory participants. [July 1, 2000] At the end of June, the European Commission adopted a new Social Policy Agenda which will run up to the year 2005. Commenting on its adoption, Anna Diamontopoulou, the Employment and Social Affairs Commissioner said "the purpose is to confront the new social challenges resulting from the radical transformation of Europe's economy and society, particularly those engendered by the knowledge-based economy. [July 1, 2000] At the end of June, the Council of Ministers decided to introduce a separate favourable tax regime for employee financial participation and a legal framework for the second pillar. [July 1, 2000] On 1 July 2000, two new plans were introduced within the Employees' Provident Fund which are designed to provide employees retiring at age 55 with additional alternatives to lump sum retirement benefits. [July 1, 2000] A government sub-commission on compensation and benefits carried out a survey earlier this year among 62 of the most representative companies in Argentina into the most common benefit practices. According to the survey, salary increases averaged 1.5% with the level of increases ranging between 1% to 6%. [July 1, 2000] The Canadian Customs and Revenue Agency has increased the period of time that foreign service can be recognised for purposes of determining retirement benefits payable under a defined benefit RPP. The new limit, effective after 1999 is five years; previously it was three years. [July 1, 2000] In June, the EU Council of Ministers unanimously adopted a common position on the draft 13th company law Directive concerning takeover bids. The proposed Directive dates back to 1989, and was amended in 1996. It has taken since then for all the political disagreements to be resolved. [July 1, 2000] Effective with retirements from January 1, 1999 the Guatemala Institute of Social Security (IGSS) has raised the limit on benefits for earnings calculations and has increased the normal retirement age. [July 1, 2000] The Guatemala Institute of Social Security (IGSS) has raised the limit on benefits for earnings calculations and has increased the normal retirement age. These changes became effective on 1 January 1999. [June 1, 2000] The Comissao de Valores Mobiliários CVM (Brazilian equivalent of the US Securities and Exchange Commission) has issued a proposal to introduce an accounting standard that is expected to have a significant impact on the local financial reports of companies operating in Brazil. [May 1, 2000] Substantial reforms of the pensions and welfare system are underway in Austria. In the negotiations to set up the new ruling coalition following the elections in October 1999, plans to reform the pensions system were a key issue. Proposals presented by the new government which took over in January have been met with substantial trade union opposition as they involve considerable cuts in social expenditure. [March 1, 2000] Just this month, the Japanese Institute of Certified Pension Accountants (JICPA) released a key ruling which will in all probability encourage companies to eliminate pension shortfalls within five years. The ruling states that companies that eliminate their pension shortfalls in under five years can treat the costs as an extraordinary loss and avoid an impact on pre-tax profits. [March 1, 2000] The Federal Council has approved changes to the pension fund investment rules (BVV2) with effect from 1 April 2000. [March 1, 2000] A new contribution schedule was introduced on 1 January 2000 for the payment and collection of contributions to the National Health Insurance Program (NHIP) in the Philippines. [February 1, 2000] In a Pensions News Special in December Watson Wyatt described the United Kingdom Government's alternative proposals for contracting-out of the new State Second Pension. Now, in a move that will be welcomed by many employers, the Government has decided that rebates for occupational schemes will continue to be calculated as at present. [February 1, 2000] The European Commission has recently published the first draft of a Directive on the supervision of pension funds, which it hopes will be adopted in 2002. [February 1, 2000] The following summarizes changes that were announced by Argentina's President that affect employers or workers in the private sector in Argentina. It is expected that the announced changes be implemented in the near future via Presidential Decree. However, note that stiff union opposition may derail the intended changes. [January 5, 2000] On 10 December 1999, the Slovenian parliament passed the pension and disability law which sets up a three pillar system for retirement provision. [January 1, 2000] The ministries of health, labour, finance and international trade and industry that are involved in the introduction of 401(k)-style defined contribution plans have decided to delay the start date for corporate retirement plans until 10 January 2001. [January 1, 2000] In drafting legislation to be submitted later this month, Japan's ruling Liberal Democratic Party (LDP) has greatly restricted the tax breaks available to employees contributing to a defined contribution plan. Japan's own 401(k)-style retirement plans are set to be introduced this autumn. [January 1, 2000] After several unsuccessful attempts the Insurance Regulatory and Development Authority (IRDA) Bill (the "IRDA Bill") was passed in December 1999. The Bill opens up the insurance sector to private Indian and foreign entrants, putting an end to the monopoly position enjoyed by the state-owned Life Insurance Corporation and the General Insurance Corporation since 1956 and 1973 respectively. [January 1, 2000] The Alberta Employment Pension Plans Amendment Act 1999 passed its Third Reading on 13 May 1999 and is expected to become effective in the third quarter of 1999, after the accompanying regulation has been completed. This is the first full review of legislation in Alberta since the Employment Pensions Act was introduced in 1986. [June 1, 1999] Iceland's public pensions system comprises a mixture of a pay-as-you-go stae scheme and industry-wide pension funds. Membership of the latter has been compulsory since 1974 although consolidated legislation on the operations pension funds was not enacted until 1997. [May 1, 1999] On 1 January 1999, the annual social security ceiling was lifted to ASch596,400. Contribution rates, however, remain unchanged for 1999. [May 1, 1999] From 1 May 1999, significant premium increases were introduced by SPP, the quasi-monopoly insurer to the nation-wide white collar ITP pension arrangement. These increases arise as a result of a reduction in the maximum permitted discount rate for insurers being implemented by the Finance Ministry against a background of generally lower bond yields. [May 1, 1999] The Netherlands office of Watson Wyatt Worldwide, Watson Wyatt BV, will be merging with the leading Dutch actuarial consulting firm Brans & Co to create Watson Wyatt Brans & Co. The merger is expected to come into effect on 1 July 1999. [May 1, 1999] At the end of March, the investment regulations that apply to pension funds in Belgium were relaxed. This was the first stage in a process that will apply equally to insurance companies' investments and that will bring Belgium more in line with European norms. [April 1, 1999] At the end of 1994 the Dutch government set up a committee, the so-called "Witteveen Committee", to report on the issue of Dutch fiscal legislation in connection with pension provisions. In late 1995, the "Witteveen proposal" was issued. Its purpose was to remove obstacles and clarify the fiscal treatment of retirement benefits, especially in light of increasing individualisation and flexibility of these benefits. [April 1, 1999] With effect from 1 January 1999, the employer contribution to the Central Provident Fund (CPF) was cut from 20% to 10%. Watson Wyatt has recently canvassed 372 companies operating in Singapore (83 locally incorporated companies and 289 multinational corporations) to gauge how they are reacting to this change both in respect of Singaporean employees and foreign workers. [April 1, 1999] During 1998, the Portuguese pension fund industry continued its rapid growth despite the reduced number of new funds, with total pension fund assets increasing by 14% to some € 11.5 billion. [April 1, 1999] In March, the Canadian Institute of Chartered Accountants (CICA) released a new accounting rule CICA 3461 relating to the accounting for pensions and other post-retirement and disability benefits. The new rule replaces one which covered pensions only and is effective for fiscal years beginning on or after 1 January 2000, with earlier adoption permitted. [April 1, 1999] Nova Scotia has made changes to its provincial Seniors' Pharmacare Program Regulations which came into effect on 1 April 1999; these changes mean that the provincial plan is now the last payer for all seniors resident in Nova Scotia. [April 1, 1999] At the end of March, the European Commission adopted a recommendation on the broad economic policy guidelines for the Member States of the European Union. Among its provisions, the recommendation calls upon a number of states to review their health care and pension systems to ensure that the 'associated burden of on public finances is sustainable in the face of the population ageing'. [April 1, 1999] On 16 March 1999, the lower chamber of the Romanian parliament approved a new pensions and social benefits law which will come into force from January next year. [April 1, 1999] On 9 February 1999, the Mauritius government issued regulations to the 1995 Income Tax Act which introduce compulsory vesting of pension rights after five years' service with an employer. [April 1, 1999] An ambitious and far-reaching reform of the pension system was implemented on 1 January 1998. By May this year, about 782,000 employees had signed up with private pension funds - over 18% of the Kazakh workforce. [April 1, 1999] In continental Europe, generous levels of state provision have traditionally constrained the development of funded occupational pensions. All this is changing. [March 1, 1999] The MPF Authority has just released the implementation timetable for the MPF. The effective start date has been set as 1 December 2000 although this date will be subject to review in early 2000 and may be deferred if the implementation of the MPFA’s computerised monitoring system falls behind schedule. [March 1, 1999] In May 1998, the French Prime Minister Lionel Jospin appointed Jean-Michel Charpin to prepare a report on reform of the pension system for French civil servants. The report is to be presented to the social partners on 25 March and to the Prime Minister in early April. [March 1, 1999] A single European Union pension fund market came a step nearer on 8 March. Directorate General XV was asked by the Taxation Policy Group of the Council of Ministers (comprising finance representatives of the member states) to draft an EU directive that will focus on the tax aspects of contributions made to occupational pension plans by workers who transfer between EU member states.
[March 1, 1999] Almost two-thirds (61%) of Asia's major employers tie bonuses to specific financial and other performance targets, according to a 1999 survey recently carried out by Watson Wyatt Worldwide.
[February 1, 1999] In its annual ranking of international consultants by total mandates on which they acted as adviser, Global Money Management (GMM) reports that Watson Wyatt Worldwide were in top position for the seventh year running with 49 appointments worth US$ 10.6bn, an increase of over 300% compared with 1997 and almost double the value of the second ranked consultant. GMM commented: 'The dramatic surge can be attributed in large part to UK pension funds reacting to the poor performance of some active balanced managers. [February 1, 1999] As in the United States, the Puerto Rico Internal Revenue Code requires that the cost of group term life insurance paid by an employer for an employee is taxable income to the employee to the extent that such group term life insurance exceeds $50,000. [February 1, 1999] Under legislation enacted in June, a National Health Insurance Fund is being set up on 1 June 1999. Contributions to the fund will be financed equally by employers and employees. Pensioners, the unemployed, mothers on unpaid maternity leave and certain other categories of people will be exempted from contributions and will be insured by local government. [December 1, 1998] Under legislation enacted in June, a National Health Insurance Fund is being set up on 1 June 1999. Contributions to | 
Employer Action Code: Monitor