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May 2007

E-Adviser is your source for updates in the areas of reward, healthcare, pensions and investments. As well as including links to information on upcoming seminars and workshops in these areas, this issue includes articles covering the following topics.

• Who's in charge? How to govern sales compensation programs
• The new healthcare landscape in Ireland, including recent changes for BUPA
• Companies over-estimate the true value of share incentives
• Investing in private equity is now becoming mainstream for institutional investors
• DC pensions in Ireland
• Strategic rewards and pay practices

Who's in charge? How to govern sales compensation programs 

During the past five years, senior managers of many public companies have felt a need to increase control and governance over sales compensation. It is a common misperception that the CEO, COO, CFO, head of human resources and head of sales have an established balance of power and sufficient information that allows them to evaluate and approve an appropriate sales compensation plan; this is rarely the case.
Read more (PDF - 356KB).

The new healthcare landscape in Ireland 

You will have read in previous healthcare bulletins there have been significant changes and developments in the Irish health insurance market since December 2006, especially centred around the initial closure of BUPA Ireland and subsequent take over by the Quinn Group. For an update on recent changes in this area, with particular attention being paid to Quinn Healthcare, VHI Healthcare, and other reforms in private health insurance, please
Read more

Companies over-estimate the true value of share incentives 

Companies in Ireland have been overestimating the financial value of executive share incentives according to the latest Executive Reward Survey compiled by benefits consultants Watson Wyatt. More difficult market conditions mean that the rule of thumb measures used by investors to gauge the value of the incentives offered to executives to win good performance are no longer valid.
Read more
Read more on Watson Wyatt’s Human Capital services.

Investing in private equity is now becoming mainstream for institutional investors 

Investing in private equity, once a minority pursuit for institutional investors, is becoming mainstream. The newspapers are full of bid rumours, countless conferences debate its influence; and investors are allocating more and more capital. This article is written as a gentle introduction to a world where the inhabitants often seem to speak a different language.
Read more (PDF - 2.3 MB)
Read more on Watson Wyatt’s Investment consulting services.

The future of DC pensions in Ireland 

Since the first emergence of DC Schemes in Ireland in the mid 1980s, where scheme designs were reasonably unsophisticated and suffered low contribution levels, almost all newly established schemes are on a DC basis. In the last number of years we have seen an increasingly new number of employers close Defined Benefit (DB) scheme’s for new hires in favour of some form of DC arrangement. Although the numbers in, and membership of, these schemes has grown, the average contribution remains relatively low and scheme designs, in the main, still remain reasonably unsophisticated.
Read more

Strategic rewards and pay practices 

The 2007 Strategic Rewards^® Survey, a collaboration between Watson Wyatt and World at Work, will explore the impact of economic growth and globalisation on HR practices, reward management, and employee attraction and retention. This survey will also determine best practices in total rewards programme design and implementation. We invite you to participate in this survey, and in return, will provide you with a copy of the report, which is due to be published in September.
Read more

Further information

Performance Statistics for the current month 

Monthly Performance Statistics is a communication from Watson Wyatt’s Dublin-based investment team giving updated performance statistics on Irish funds suitable for pension investors.

Latest edition of Investment Quarterly 

Investment Quarterly is a publication produced by Watson Wyatt’s Dublin-based investment team. It contains coverage of topical and historical market issues via articles, market commentary, economic data and performance analysis – invaluable for all those involved in the investment of pension scheme assets.

Investments have the greatest potential for influencing the ultimate size of pensions, bar contribution rates. We find however, that many members do not understand how different investments can impact upon their retirement plans.