The number of international pension plans and international savings plans that are offered in countries operating in challenging political or economic circumstances has risen to 126, up from 54 in 2019, according to a new survey by WTW.
The survey, which polled 960 global plan sponsors that offer IPPs and ISPs, found this increase is due to several economic challenges, including rising inflation and a higher-than-normal number of sovereign defaults — 18 in 10 countries since 2020 — that have made local pension and savings provision riskier for local employees in certain countries.
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While 56 per cent of IPPs and ISPs operate globally, plans operated in Europe have seen the largest growth, now accounting for a quarter (26 per cent) of all plans globally. Among countries facing challenging political and economic circumstances, Lebanon reported the highest number (35) of IPPs/ISPs, up from 28 in 2023.
There is an estimated $19.5 billion in IPP/ISP assets under management globally, an increase of 33 per cent since 2018. More than half (52 per cent) of these plans have less than $5 million in assets and just one per cent have more than $250 million.
“Economic and political instability in many countries, along with rising inflation, have created many challenges for employers looking to provide stable pension and savings arrangements for their employees around the world,” said Tony Broomhead, managing director of integrated and global solutions at WTW, in a press release. “IPPs and ISPs can be used to provide a more secure vehicle and deliver better pension outcomes with access to global hard currency investment funds, reducing exposure to local high-risk markets.”
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