The ideal plan
If BAT could implement the ideal international pension plan, what would it look like? p The plan would be externally funded and its investments segregated from company assets.
p We would require an investment vehicle with a spread of assets that maximised investment performance consistent with acceptable risk, effective cost management and stability in contribution rates. However, we would want the tax-exempt status enjoyed by domestic pension fund investments in many countries. Given the complexity and diversity of regulations around the world which surround the provision of benefits to non-resident employees it is difficult to foresee how this can be achieved.
p The plan should ideally be able to accept contributions and pay benefits in as wide a range of currencies as possible.The volatility of ex-change rates makes this unrealistic but a spread of major international currencies would be required.
p We would want high flexibility in terms of benefit provision, ideally catering for both DB and DC benefits. The plan should provide for permutations of benefits to match diverse employee expectations, AVCs etc.
p The plan should provide for the consolidation of an individual em-ployee's retirement benefits, enabl-ing transfer from former home country plans and previous employer schemes.
p Plan administration must be efficient and cost effective and the benefits well communicated.