http://www.watsonwyatt.com Latest Watson Wyatt Global News Briefs en-us Copyright 2005 Watson Wyatt Worldwide http://backend.userland.com/rss091 5/9/2008 1:55:30 PM 20 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. [EUROPE - United Kingdom]http://www.watsonwyatt.com/search/parser.asp?ID=190084/30/2008EUROPE - United KingdomMore 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. [EUROPE - Italy]http://www.watsonwyatt.com/search/parser.asp?ID=190294/30/2008EUROPE - ItalyEmployed and independent workers' minimum taxable income for 2008 tax filings has been raised as of January 1, 2008. [LATIN AMERICA/CARIBBEAN - Colombia]http://www.watsonwyatt.com/search/parser.asp?ID=190304/30/2008LATIN AMERICA/CARIBBEAN - ColombiaAs 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. [ASIA-PACIFIC - Australia]http://www.watsonwyatt.com/search/parser.asp?ID=190374/30/2008ASIA-PACIFIC - AustraliaThe 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. [UNITED STATES]http://www.watsonwyatt.com/search/parser.asp?ID=190264/29/2008UNITED STATESNew 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. [EUROPE - Spain]http://www.watsonwyatt.com/search/parser.asp?ID=190274/29/2008EUROPE - SpainThe 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. [LATIN AMERICA/CARIBBEAN - Chile]http://www.watsonwyatt.com/search/parser.asp?ID=190174/25/2008LATIN AMERICA/CARIBBEAN - ChileProposed 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. [EUROPE - Sweden]http://www.watsonwyatt.com/search/parser.asp?ID=190074/23/2008EUROPE - SwedenA 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. [LATIN AMERICA/CARIBBEAN - Panama]http://www.watsonwyatt.com/search/parser.asp?ID=189784/16/2008LATIN AMERICA/CARIBBEAN - PanamaEmployees 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. [MIDDLE EAST - Israel]http://www.watsonwyatt.com/search/parser.asp?ID=189694/14/2008MIDDLE EAST - IsraelEmployers 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. [LATIN AMERICA/CARIBBEAN - Argentina]http://www.watsonwyatt.com/search/parser.asp?ID=188913/31/2008LATIN AMERICA/CARIBBEAN - ArgentinaMinimum pensions and salaries are being adjusted based on corrected inflation estimations, the Labor Minister recently announced. [EUROPE - France]http://www.watsonwyatt.com/search/parser.asp?ID=188953/31/2008EUROPE - FranceThe 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. [GLOBAL]http://www.watsonwyatt.com/search/parser.asp?ID=189013/31/2008GLOBALCompanies 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. [EUROPE - Ireland]http://www.watsonwyatt.com/search/parser.asp?ID=188883/28/2008EUROPE - IrelandEmployers hiring illegal migrant workers from outside the European Union could face strong penalties under new immigration rules that took effect on February 29, 2008. [EUROPE - United Kingdom]http://www.watsonwyatt.com/search/parser.asp?ID=188933/28/2008EUROPE - United KingdomInvestment 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. [LATIN AMERICA/CARIBBEAN - Colombia]http://www.watsonwyatt.com/search/parser.asp?ID=188813/27/2008LATIN AMERICA/CARIBBEAN - ColombiaPooling 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. [GLOBAL]http://www.watsonwyatt.com/search/parser.asp?ID=188723/26/2008GLOBALA 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. [ASIA-PACIFIC - China]http://www.watsonwyatt.com/search/parser.asp?ID=188823/19/2008ASIA-PACIFIC - ChinaMeasures 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. [EUROPE - Spain]http://www.watsonwyatt.com/search/parser.asp?ID=188963/18/2008EUROPE - SpainA lower retirement age and a new minimum pension system are being implemented as the result of legislation that passed on January 16, 2008. [LATIN AMERICA/CARIBBEAN - Bolivia]http://www.watsonwyatt.com/search/parser.asp?ID=188863/10/2008LATIN AMERICA/CARIBBEAN - BoliviaThe minimum wage has increased recently in Bolivia, Brazil, Colombia, Ecuador, El Salvador, Guatemala, Jamaica, Mexico, Nicaragua, Panama and Uruguay. [LATIN AMERICA/CARIBBEAN]http://www.watsonwyatt.com/search/parser.asp?ID=188903/7/2008LATIN AMERICA/CARIBBEANEffective 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. [CANADA - ENGLISH]http://www.watsonwyatt.com/search/parser.asp?ID=188303/5/2008CANADA - ENGLISHThe 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. [CANADA - ENGLISH]http://www.watsonwyatt.com/search/parser.asp?ID=187332/28/2008CANADA - ENGLISHRecent revisions to the employee benefits accounting standard, AS15 (Revised 2005), will allow employers more time to spread out new liabilities on their balance sheets. [ASIA-PACIFIC - India]http://www.watsonwyatt.com/search/parser.asp?ID=187192/27/2008ASIA-PACIFIC - IndiaEmployers 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. [EUROPE - France]http://www.watsonwyatt.com/search/parser.asp?ID=187202/27/2008EUROPE - FranceRecently 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. [EUROPE - Austria]http://www.watsonwyatt.com/search/parser.asp?ID=186952/25/2008EUROPE - AustriaEmployers 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. [EUROPE - Italy]http://www.watsonwyatt.com/search/parser.asp?ID=186792/21/2008EUROPE - ItalyThe 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. [EUROPE - Germany]http://www.watsonwyatt.com/search/parser.asp?ID=186842/21/2008EUROPE - GermanyThe 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. [EUROPE - Spain]http://www.watsonwyatt.com/search/parser.asp?ID=186712/20/2008EUROPE - SpainA 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. [EUROPE - United Kingdom]http://www.watsonwyatt.com/search/parser.asp?ID=186752/20/2008EUROPE - United KingdomA 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. [CANADA - ENGLISH]http://www.watsonwyatt.com/search/parser.asp?ID=186722/19/2008CANADA - ENGLISHA 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. [UNITED STATES]http://www.watsonwyatt.com/search/parser.asp?ID=187362/19/2008UNITED STATESIn 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. [LATIN AMERICA/CARIBBEAN - Argentina]http://www.watsonwyatt.com/search/parser.asp?ID=186662/13/2008LATIN AMERICA/CARIBBEAN - ArgentinaMedical 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. [GLOBAL]http://www.watsonwyatt.com/search/parser.asp?ID=186672/7/2008GLOBALThe government has revised the way its wealth tax is calculated, subjecting a greater amount of individual net worth to the tax. [LATIN AMERICA/CARIBBEAN - Argentina]http://www.watsonwyatt.com/search/parser.asp?ID=186422/6/2008LATIN AMERICA/CARIBBEAN - ArgentinaThe 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. [EUROPE - United Kingdom]http://www.watsonwyatt.com/search/parser.asp?ID=186412/4/2008EUROPE - United KingdomGlobal 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. [GLOBAL]http://www.watsonwyatt.com/search/parser.asp?ID=186051/30/2008GLOBALA 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. [UNITED STATES]http://www.watsonwyatt.com/search/parser.asp?ID=186061/30/2008UNITED STATESSpecial 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. [EUROPE - France]http://www.watsonwyatt.com/search/parser.asp?ID=185821/28/2008EUROPE - FranceNew 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. [ASIA-PACIFIC - China]http://www.watsonwyatt.com/search/parser.asp?ID=185841/28/2008ASIA-PACIFIC - ChinaThe 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. [EUROPE - Italy]http://www.watsonwyatt.com/search/parser.asp?ID=185771/25/2008EUROPE - ItalyThe 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. [UNITED STATES]http://www.watsonwyatt.com/search/parser.asp?ID=185811/25/2008UNITED STATESPension 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. [CANADA - ENGLISH]http://www.watsonwyatt.com/search/parser.asp?ID=185461/21/2008CANADA - ENGLISHQuebec 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. [CANADA - ENGLISH]http://www.watsonwyatt.com/search/parser.asp?ID=185421/17/2008CANADA - ENGLISHWith 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. [ASIA-PACIFIC - Australia]http://www.watsonwyatt.com/search/parser.asp?ID=185241/16/2008ASIA-PACIFIC - AustraliaThe 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. [LATIN AMERICA/CARIBBEAN - Bolivia]http://www.watsonwyatt.com/search/parser.asp?ID=185411/16/2008LATIN AMERICA/CARIBBEAN - BoliviaRecent 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. [EUROPE - United Kingdom]http://www.watsonwyatt.com/search/parser.asp?ID=185831/16/2008EUROPE - United KingdomThe 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. [ASIA-PACIFIC - Malaysia]http://www.watsonwyatt.com/search/parser.asp?ID=185151/10/2008ASIA-PACIFIC - MalaysiaAccording 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. [EUROPE - Italy]http://www.watsonwyatt.com/search/parser.asp?ID=186041/10/2008EUROPE - ItalyPension schemes likely will have to pay increased general and Pension Protection Fund (PPF) levies in the United Kingdom, effective April 1, 2008. [EUROPE - United Kingdom]http://www.watsonwyatt.com/search/parser.asp?ID=1847212/31/2007EUROPE - United Kingdom