General Electric of the US acquires a company almost every other week. So the international compensation and benefits team has found itself scrutinising a large number of diverse and often traditional pension arrangements.

Part of the job of David Koonce, manager of international compensation and benefits and employee practices, based in Fairfield, Connecticut, is to ensure our businesses are asking the rightquestions so they avoid any nasty surprises" from hidden liabilities.

This is no t a trivial task. The largest company in the world by market capitalisation has seen its European workforce increase from 30,000 five years ago to 70,000 today and this should reach 100,000 by 2000. GE Europe is now worth $20.6bn, revenues have trebled between 1994 and 1997 and net income has tripled to $1.5bn with growth accelerating as Europe continues its recovery.

The focus on Europe is not due to acquisitions alone, with the company currently reviewing its insurance arrangements for the region with a view to incorporating local funding arrangements into common investment funds managed by in-house manager GE Investments.

"We undertook the preferred provider review of our insurance programmes specifically to lower the cost of our insurance programmes and to unbundle the insurance product for a lot of our small companies into a common investment fund while maintaining the integrity of the plan design," he explains.

Koonce believes that in this work and other areas the company has established itself as a trend-setter. He defines his role as "working with our businesses in the design, development, funding and general administration of all our benefit plans and practices throughout the world, outside the US".

The diverse nature of the company, with 12 businesses - one of which has 27 concerns within it - dictates the benefits philosophy. "At corporate '50,000 feet' level, the philosophy is to ensure that our businesses are developing programmes and policies that are appropriate to their needs and ability to provide." The company, Koonce says, takes pension plans and other contingent liability vehicles very seriously. "We don't want to put our local management in a position where they may compromise the flexibility of future management."

Koonce is concerned about the benefits practices of acquired companies in Europe. "When we buy we are aware that we may be buying some bad practices. There are a lot of pension policies that have been driven more by tradition than by progress, and as a result we make sure that we value what we are buying appropriately."

In this context, he is also concerned about shifting government policies which may encourage bad practices, while the state is simultaneously retreating from many aspects of social security provision. "When we do our due diligence in respect of the companies - and we are basically reviewing one every other week - we want to make sure that we keep all these issues in focus."

He also sees legislative frameworks potentially frustrating change in new acquisitions. "When re-engineering organisations there is an opportunity to maximise economies of scale but there can be very restrictive legislation."

In relation to European acquisitions, Koonce's role is to work with the businesses to project manage. "I will either project manage it from here or from the company if it is large enough or I will work with our people to ensure that consultants, actuaries, bankers, trustees, lawyers, human resources and insurance companies are all speaking the same language."

Once the compensation and benefits practice is decided upon it then comes back to Fairfield not for approval so much as for endorsement in what Koonce describes as a third party review. A similar procedure operates for the normal development of benefits. Koonce believes that one of the strengths of corporate is that it has the opportunity to view the entire diverse organisation. "We have constant feedback whether organised through human resource and financial meetings, by travelling or through one-off phone calls.

"I spend about 40% of my time abroad, ensuring that if there is a best practice in one country or even in one of the companies within that country that it is communicated to all the others. We are so big and so diverse that we are probably first in identifying and perhaps setting the trends, in the human resource arena."

Some of the practices, he believes are unique. Among these, he lists the movement of third-country nationals. "We have revamped our development path opportunities to include a proviso that these assignments only last for a short duration because they are to be used as a development tool, not as a place to park people. We want to enhance their career and use it as an opportunity to add more value to the company as a whole."

He also believes that the company has broken new ground with its consolidation of funds. "We take advantage of economies of scale in pension funding. Most of our large funds have been consolidated into some sort of common investment fund," he says. These funds are managed by GE Investments, which now offers third-party money management as well as managing in-house assets.

However, he adds: "Just because GE Investments is one of our companies it is not a foregone conclusion that they will oversee all our investments. They have to prove themselves."

In the instance of acquisition, he says that circumstances are clearly different between the US and Europe. In the US, it is relatively easy to take over the assets, as ownership is clear, but this is not the case in Europe where different groups may have responsibility for the assets."

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