International Pension Plans (IPPs) provide a simplified, centralised and consistent way for global employers to support employees to save for their retirement, wherever in the world they are based (subject to local legislation).
For larger organisations, the difference an IPP can make is significant. Traditional methods require managing multiple providers and licenses in every country as well as constant monitoring of tax and regulatory changes, demanding more time, effort and bigger administration teams. In contrast, IPPs can remove or simplify that complexity.
Centralising benefits through a single provider delivers economies of scale, ensures consistent employee benefits and streamlines HR processes through one point of contact. It also enables employees to move between countries without the need to change their retirement savings plan according to the jurisdiction they reside in.
With that in mind, it is no surprise that IPPs are used by hundreds of organisations and thousands of mobile employees globally.
To further demonstrate why an IPP works for an international organisation, here we share a case study of a well-known multinational employer we supported in the establishment of an Isle of Man domiciled IPP.
About the employer
- A global financial services business with circa 1,300 employees
- Employees spread in 17 countries across 3 continents; some locations with very low headcounts
- Some employees based in countries with limited or no pension options, where local investments are considered unsecure and high risk
The employer’s requirements
- To harmonise benefits as much as possible, to provide parity across employees globally and consequently maximise talent attraction and retention
- To simplify the administrative burden for the global HR team
- To contribute directly to the plan on behalf of their employees as well as enabling employees to elect to do so
- To enable employees to save for retirement, and in times of financial hardship allow limited access to their retirement savings
Why did they choose Boal & Co?
- Highly recommended by global employee benefit consultants and leading advisers
- Recognised leader by way of expertise and capability in the IPP market for independent trustee services
- Long-established with more than 30 years of experience
- Knowledgeable, capable team with a track record of service delivery
- Large, long standing international client base
- Access (through partners) to ‘best of breed’ international investments in all major currencies
- Focus on international retirement benefits (not a general trust company), meaning a dedicated specialisation in retirement benefits
- Headquartered in the Isle of Man:
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- the international finance centre (‘IFC’) with unique and robust, specific legislation for IPPs (Retirement Benefits Schemes Act 2000 and associated regulations)
- highly regarded for its quality regulatory and governance frameworks and strong financial service reputation
- tax neutral and listed on OECD whitelist
- enables FATCA and CRS reporting exemptions for qualifying IPPs
Steps taken to Implement the plan
- The employer contacted their employee benefit consultant and through a well-thought out selection process, the employer chose Boal & Co as their trustee and a separate plan provider as the member-recordkeeper and investment platform.
- With a choice of a bespoke or standardised plan design, the employer selected the standardised plan because it was flexible enough to be able to meet their requirements, without the need for bespoke changes.
- The employer provided customer due diligence documents to Boal & Co and the parter, platform provider.
- As part of a plan implementation project team incorporating Boal & Co, the platform provider and employer, the Boal & Co team worked to provide plan and trust documentation, training and to clarify responsibilities to ensure the smooth implementation and ongoing the running of the plan
- Agree upon and sign simple legal documents including Trust Deed and Rules, and Terms of Business.
- Boal & Co worked with the Isle of Man Financial Services Authority and Income Tax Division to obtain the necessary approvals before the plan going live.
Summary - benefits of an IPP to a global employer
- Portability of retirement or long-term savings, enabling employees to remain in a single plan while moving to various locations with the employer
- Protection of member benefits due to segregation of member assets from those of the employer
- Minimal reporting requirements on the employer (AEOI, regulatory reporting and financial statements are managed by Boal & Co as trustee)
- Breadth of country coverage is vastly increased over non trust based or traditional solutions, making it easier to roll out to new locations as a company expands
- Reduced risk for the employer as the plan governance, monitoring of contributions, benefit payments and administration are all the responsibility of the trustee
- Trustee provides an independent focus on the member, ensuring fair member outcomes
In conclusion, International Pension Plans (IPPs) offer global employers a streamlined, secure, and highly regulated solution for delivering consistent retirement benefits across borders. By replacing complex, country-specific arrangements with a single, centralised plan, IPPs can reduce administrative burden, ensure fairness, and provide portability for internationally mobile employees.
Whilst this case study focuses on IPP benefits to an international employer with a globally dispersed workforce, IPPs can also prove beneficial for smaller employers in a single location where local retirement benefits/pension legislation or investment options may be prohibitive.
To learn how Boal & Co can support you to provide a pension to your globally mobile workforce, contact Conor Boal.
Conor Boal
Client Relations
