- Press Release: Stable Value Funds Could Carry Considerable Risk [United States, June 24, 2009]
- Special Memorandum: Ontario Provides Temporary Solvency Funding Relief [Canada, June 23, 2009]
- Press Release: PPF and Pensions Regulator Warn Employers That Pensions Will Cost More in an Upturn [Europe, June 23, 2009]
- Insider Article: IRS Allows Struggling Employers to Reduce or Suspend Nonelective Contributions to 401(k) Plans [United States, June 2009]
- Research Report: Effect of the Economic Crisis on Canadian HR Programs [Canada, June 2009]
- Press Release: Companies Planning to Reinstate Some Programs Cut During the Economic Crisis [United States, June 22, 2009]
- Research Report: Effect of the Economic Crisis on HR Programs [United States, June 2009]
The Key Issues
Roots of the Financial Crisis
Our seminal Defining Moments report foreshadowed key elements of the financial crisis, including over-complexity of financial products, excessive “short-termism” and the growing likelihood of major market events.
Investing Strategically
Which investment strategies make sense in the current environment? Five Watson Wyatt investment leaders discuss how the changes of the past year are affecting institutional investors and investment strategies going forward.
We also give our views on rebalancing pension investments, liability-driven investment strategies and the critical issues facing pension funds.
Retirement Plans
The financial crisis highlights the relative pros and cons of defined benefit pensions and 401(k) plans, sharply contrasting the predictable, mainly guaranteed retirement income of pensions with the day-to-day fluctuation of 401(k) account values. Employees who have only a defined contribution plan are less confident in their retirement prospects and plan to work longer than those who have a defined benefit plan. In the United States, for the first time the majority of Fortune 100 companies now offer new salaried employees only a defined contribution (DC) plan.
Managing the Workforce
With signs that an economic recovery might be nearing, most U.S. employers plan to reverse some of the changes they’ve been making to their pay, benefits and other HR programs. However, the cost-cutting actions taken over the past 10 months will likely have long-lasting implications. Many companies expect to be operating with a smaller workforce, with more employees working past their ideal retirement age and with less attractive benefits packages.
In a new consultants’ roundtable, five Watson Wyatt thought leaders discuss workforce reductions from several different standpoints including communication, budgetary implications and workforce planning.
Executive Pay
In the United States, challenging economic conditions, new legislation and enormous pressure to respond to shareholder concerns are prompting companies to reduce executives’ annual bonuses. And in France, strict limits have been placed on executive bonuses at companies that have received State aid
In Canada, many executives’ stock options are now underwater and the value of their long-term incentives has depreciated significantly. Watson Wyatt experts recommend four practical paths for navigating the uncertainty in incentive design during difficult times.
The State of Mergers & Acquisitions
The global economic crisis is creating opportunities for companies with resources, but there are also new challenges. Deal processes and structures are evolving, pricing the value of a business has become more difficult and cross-border transactions are resulting in complex governance issues. Watson Wyatt M&A experts recently discussed factors to consider when pursuing deals in the new economic climate.
Government Intervention
Many countries, including the United States, Germany and Japan, have passed stimulus packages in response to the global economic crisis. Their provisions address a broad range of HR issues and implement changes such as stricter executive compensation regulations, temporary defined benefit plan funding relief and subsidized health coverage for laid-off workers.
With much riding on the success of government stimulus packages worldwide, Watson Wyatt's Roger Urwin discussed how the economic crisis might evolve in an interview with the Australian Broadcasting Corp.
The Insurance and Financial Services Industry
The debate over insurance companies moving to a full fair value mark-to-market reporting regimen — such as Market-Consistent Embedded Value (MCEV) — has intensified. This Watson Wyatt article examines some of the shortcomings of MCEV reporting as it is currently constructed – particularly in periods of heightened volatility – and recommends improvements.
Growing Sales
Fewer companies are planning to reduce their sales forces, and the best sales leaders are now focusing on sales fundamentals as a means for growing out of the downturn. These companies are taking six distinct steps, including staying close to customers and tailoring solutions to clients’ current business needs.
Employee Communications
Many employers are stepping up communication to employees in an effort to calm nerves and show leadership. Experts at Watson Wyatt suggest communication strategies to help leaders keep their workforces engaged and productive during layoffs.
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Defined Contribution Strategies: What’s Next?
Plan sponsors are reevaluating their defined contribution offerings in light of recent events, says Watson Wyatt’s Sue Walton.
Shoring Up Employee Trust Amid Layoffs
Watson Wyatt’s Kathryn Yates explains how effective communication can keep employee trust and engagement levels high – even during turbulent times.
Unknown Territory
Watson Wyatt’s Roger Urwin discusses the outlook for institutional investors and the economy at large in an interview with the Australian Broadcasting Corp.
Talent Management Programs Crucial During Financial Crisis
In a tough economic climate, talent management can be a key business differentiator, says Watson Wyatt’s Elise Freedman.
Investment Strategies
Watson Wyatt's Carl Hess discusses short- and long-term strategies for institutional investors in the current economic turmoil.
Short-term strategies
Long-term strategies
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