http://www.watsonwyatt.com Latest Watson Wyatt Global News Briefs en-us Copyright 2005 Watson Wyatt Worldwide http://backend.userland.com/rss091 1/5/2009 11:26:00 PM 20 The final report of the Alberta-British Columbia Joint Expert Panel on Pension Standards was published on November 28, 2008. The report makes over 130 recommendations, many of which will require several important legislative and regulatory changes. The importance of finding a balance between protecting the pension promise and encouraging the creation and maintenance of pension plans is highlighted throughout. [CANADA - ENGLISH]http://www.watsonwyatt.com/search/parser.asp?ID=2030912/31/2008CANADA - ENGLISHAccording to a new survey, the number of companies implementing cost-cutting measures has increased sharply in just two months. Among the changes are moves towards layoffs, hiring and salary freezes and smaller pay raises. [UNITED STATES]http://www.watsonwyatt.com/search/parser.asp?ID=2031112/31/2008UNITED STATESSpouses will be able to apply to transfer a lump sum of their pension entitlement following a breakdown of their marriage, according to a proposal by Ontario's Minister of the Attorney General on November 24, 2008. This proposal will imply a significant shift from the current system, in which division of pension income is deferred until payments start – upon the member's termination, retirement or death. [CANADA - ENGLISH]http://www.watsonwyatt.com/search/parser.asp?ID=2031212/31/2008CANADA - ENGLISHA recent benchmark study shows how Chilean firms are responding to the new APVC (collective voluntary provisional savings) system. In particular, a key finding is that there will not be an immediate widespread adoption of APVC plans, but that acceptance will be gradual. [LATIN AMERICA/CARIBBEAN - Chile]http://www.watsonwyatt.com/search/parser.asp?ID=2034012/31/2008LATIN AMERICA/CARIBBEAN - ChileIn response to changes in life expectancy and long-term return assumptions, the Social Security committee of the Swiss parliament has approved a reduction in the minimum required conversion factor, the ratio that converts retirement savings to an annual pension. [EUROPE - Switzerland]http://www.watsonwyatt.com/search/parser.asp?ID=2030412/30/2008EUROPE - SwitzerlandA draft regulation to amend unlocking rules and bring the old Life Income Funds (LIF) and Locked-in Retirement Income Funds (LRIF) into line with new LIFs has been proposed by the Ontario Ministry of Finance. If approved, the regulation would allow one withdrawal from LIFs and LRIFs; modify the annual payment from these accounts to match the new LIF regulations; and move the existing Locked-in Retirement Account (LIRA) provisions to a separate, new schedule. [CANADA - ENGLISH]http://www.watsonwyatt.com/search/parser.asp?ID=2030712/30/2008CANADA - ENGLISHRules governing lump-sum disbursements in Romania's pension system have been approved. The state pension has also been raised in changes implemented on October 1, 2008. [EUROPE - Romania]http://www.watsonwyatt.com/search/parser.asp?ID=2030812/30/2008EUROPE - RomaniaEffective January 1, 2009, mandatory public health insurance and unemployment insurance contributions will change, according to the so-called “Sozialversicherungs-Rechengrößenverordnung 2009”. [EUROPE - Germany]http://www.watsonwyatt.com/search/parser.asp?ID=2029812/29/2008EUROPE - GermanyOn December 23, 2008, President Bush signed the Worker, Retiree and Employer Recovery Act of 2008 into law. While the legislation, which Congress passed by unanimous consent, includes provisions to provide much-needed relief for pension plan sponsors as well as individual investors, it does not include a number of key proposals the business community is seeking. [UNITED STATES]http://www.watsonwyatt.com/search/parser.asp?ID=2029212/27/2008UNITED STATESImplementation clarifications for China's Labor Contract Law have been published and are in effect as of September 18, 2008. The new regulations include provisions for the absence of employment contracts and the calculation of severance payment. [ASIA-PACIFIC - China]http://www.watsonwyatt.com/search/parser.asp?ID=2029112/26/2008ASIA-PACIFIC - ChinaA new law approved on October 19, 2008 reduced the requisite minimum working years to retire in Uruguay. The legislation also introduces special compensation for older retirees, new requirements to obtain disability pensions and special maternity benefits. Most of the changes will become effective in February 2009. [LATIN AMERICA/CARIBBEAN - Uruguay]http://www.watsonwyatt.com/search/parser.asp?ID=2029312/26/2008LATIN AMERICA/CARIBBEAN - UruguayWorkers are much less willing to pay higher premiums in order to keep their out-of-pocket costs such as deductibles and co-pays lower and more predictable, according to a recent survey. As they take steps to lower their current costs, many of their actions could lead to much higher costs in the future. [UNITED STATES]http://www.watsonwyatt.com/search/parser.asp?ID=2029412/26/2008UNITED STATESProposals announced in the 2008 Pre-Budget Report, released by the U.K. government on November 24, 2008 include increases in employer and employee National Insurance contributions. This increase is part of a move to improve the economic sustainability of public finances in the medium term, and will take effect largely in 2011 when the government expects the economy to be recovering from the current downturn. Also proposed were several measures intended to provide an immediate boost to the national economy, including a reduction in value-added tax. [EUROPE - United Kingdom]http://www.watsonwyatt.com/search/parser.asp?ID=2029512/26/2008EUROPE - United KingdomAccording to recent survey findings, many defined benefit plans (DB) in the U.K. expect employer contributions to rise following their next valuation. Also, the financial turmoil and subsequent recession is expected to drive pension plan change generally, including plans closing to new entrants, closing to future accrual for existing members or making other changes to reduce costs. [EUROPE - United Kingdom]http://www.watsonwyatt.com/search/parser.asp?ID=2029612/26/2008EUROPE - United KingdomAs of January 2009, the earnings ceiling to make pension contributions under the Canada Pension Plan will increase, according to a recent announcement by the Canada Revenue Agency. Contribution rates will remain unchanged. [CANADA - ENGLISH]http://www.watsonwyatt.com/search/parser.asp?ID=2018211/30/2008CANADA - ENGLISHThe Swiss minimum guaranteed interest rate that pension funds must provide their active plan members has been cut. [EUROPE - Switzerland]http://www.watsonwyatt.com/search/parser.asp?ID=2018611/30/2008EUROPE - SwitzerlandDue to the financial crisis, many pension funds in Switzerland are suffering from poor investment performance, resulting in lower coverage ratios. [EUROPE - Switzerland]http://www.watsonwyatt.com/search/parser.asp?ID=2018711/30/2008EUROPE - SwitzerlandEmployers can now contribute to their employees' accounts, and take advantage of the accompanying tax deduction, according to changes announced in the rules governing contributions to and withdrawals from the Supplementary Retirement Scheme (SRS). Also, SRS members will be able to continue contributing to their accounts after they turn 62, when they can make their first penalty-free withdrawal. The new rules come into effect on October 1, 2008. [ASIA-PACIFIC - Singapore]http://www.watsonwyatt.com/search/parser.asp?ID=2014911/28/2008ASIA-PACIFIC - SingaporeReforms to the Russian social security system to include a pension insurance plan have been announced. These changes, which could increase the burden of total payments made by employers, are expected to come into effect from January 2010. [EUROPE - Russia]http://www.watsonwyatt.com/search/parser.asp?ID=2015111/28/2008EUROPE - RussiaRevisions to the Employment Permit System for foreign workers are currently being discussed in Korea. Proposals under discussion are to extend the maximum employment period from the current three years to five years and to increase the minimum wage. If approved, these measures are likely to take effect in 2009. [ASIA-PACIFIC - Korea]http://www.watsonwyatt.com/search/parser.asp?ID=2015411/28/2008ASIA-PACIFIC - KoreaSingapore's Employment Act has been updated to cover more workers, extend employment standards and benefits and increase fines for employers who do not abide by its regulations. The changes to the Act come into effect on January 1, 2009. [ASIA-PACIFIC - Singapore]http://www.watsonwyatt.com/search/parser.asp?ID=2015511/28/2008ASIA-PACIFIC - SingaporeDefined contribution pension providers are perceived by sponsors and trustees to be offering better service currently than they historically have, according to recent Watson Wyatt survey findings. Poor service ratings appear to be declining compared with four years ago, although ratings of “good” and “excellent” seem also to be declining for many aspects of service. [EUROPE - United Kingdom]http://www.watsonwyatt.com/search/parser.asp?ID=2015611/28/2008EUROPE - United KingdomThe Pension Protection Fund (PPF) intends to increase the proportion of its annual levies to be paid by the U.K.'s 100 largest defined benefit pension plans. The amount of the increase will be based on the PPF's assessment of the long-term risk each plan represents, according to a new proposal published on November 18, 2008. If the proposal is approved, the new levies will come into effect from the 2011/12 levy year. [EUROPE - United Kingdom]http://www.watsonwyatt.com/search/parser.asp?ID=2015711/28/2008EUROPE - United KingdomThe Securities and Exchange Commission has published a detailed plan that could allow some publicly traded U.S. companies to use international accounting rules for financial reporting as early as the end of 2009, and could lead to all publicly traded U.S. companies using these rules by 2016. [UNITED STATES]http://www.watsonwyatt.com/search/parser.asp?ID=2015811/28/2008UNITED STATESIn a regulation aimed at tackling money laundering, it has become compulsory for pension funds to register monthly transactions that exceed a certain amount. The regulation was approved on September 2, 2008. [LATIN AMERICA/CARIBBEAN - Brazil]http://www.watsonwyatt.com/search/parser.asp?ID=2016811/28/2008LATIN AMERICA/CARIBBEAN - BrazilThere have been substantial cuts in sick leave benefits in the Czech Republic as a result of legislation that aims to discourage abuse of the extensive health insurance provided by the state. Additionally, in provisions that come into effect on January 1, 2009, some of the burden of the benefits payment will shift from the state to the employer. [EUROPE - Czech Republic]http://www.watsonwyatt.com/search/parser.asp?ID=2016911/28/2008EUROPE - Czech RepublicDraft amendments to the Employment Insurance Act could subsidize parental leave for up to six months. The new policy aims to fight discrimination against working women and motivate men to play more of a role in their children's upbringing. If approved, the new policy is expected to take effect in the first half of 2009. [ASIA-PACIFIC - Taiwan]http://www.watsonwyatt.com/search/parser.asp?ID=2017011/28/2008ASIA-PACIFIC - TaiwanA Social Security Assistance Tax on pensions has been approved by Congress, replacing the income tax imposed on pensions in 2007. It raises the non-taxable minimum pension by 60 percent and is expected to reduce the number of pensioners who pay tax from 21.7 percent to 13 percent of total pensioners. This new tax came into effect on July 1, 2008. [LATIN AMERICA/CARIBBEAN - Uruguay]http://www.watsonwyatt.com/search/parser.asp?ID=2017111/28/2008LATIN AMERICA/CARIBBEAN - UruguayThe proposal to merge Argentina's two existing pension systems by nationalizing private pension funds has been passed by the Argentine parliament. The law comes into effect on December 15, 2008. [LATIN AMERICA/CARIBBEAN - Argentina]http://www.watsonwyatt.com/search/parser.asp?ID=2017211/28/2008LATIN AMERICA/CARIBBEAN - ArgentinaAmendments to the 2007/08 Pensions Bill, regarding changes to the Pensions Regulator's Contribution Notice (CN) powers, were announced on October 20, 2008. The key amendment will allow the regulator to compel employers to pay into pension plans if decisions have been taken that are materially detrimental to the likelihood of members' benefits being paid in full, without (as is currently the case) having to prove that this was the intended outcome of those actions. [EUROPE - United Kingdom]http://www.watsonwyatt.com/search/parser.asp?ID=2001010/31/2008EUROPE - United KingdomWorkers in the U.K. are starting to retire later, according to analysis of data from the Office of National Statistics (ONS). The average age at which men who were economically active at 50 retire from the labor market reached 64.6 years in 2008 – its highest level since the indicator became available in 1984. The equivalent figure for women was 61.9 years. [EUROPE - United Kingdom]http://www.watsonwyatt.com/search/parser.asp?ID=2001210/31/2008EUROPE - United KingdomAccording to a recent survey, a quarter of U.S. employers plan to make layoffs in the next 12 months as the global economic crisis continues to unfold. However, most companies are responding by focusing on increased employee communication and smaller cost-saving measures. [UNITED STATES]http://www.watsonwyatt.com/search/parser.asp?ID=2001310/31/2008UNITED STATESIreland's Budget 2009, brought back two months to October 14, 2008, focuses on restoring public finances in a time of unprecedented global financial strife. Among key measures implemented is a reduction in the limit on personal contributions to pension products and employer-sponsored pension plans, placing an effective cap on maximum contributions to pension plans. The reductions apply to maximum employee contributions; maximum overall (i.e. combined employer and employee) contributions under occupational pension plans are not affected. [EUROPE - Ireland]http://www.watsonwyatt.com/search/parser.asp?ID=2001410/31/2008EUROPE - IrelandIn an amendment approved in October 2008, the ceiling on employer contributions to healthcare will be eliminated as of November 1, 2008. Changes in income tax deductions were also approved in September 2008, and will be applicable to the 2008 tax year. [LATIN AMERICA/CARIBBEAN - Argentina]http://www.watsonwyatt.com/search/parser.asp?ID=2001510/31/2008LATIN AMERICA/CARIBBEAN - ArgentinaA new pension law that could eliminate private pension fund administrators and lower the retirement age is currently being discussed in the Senate. If approved, the law will reform the second pillar of the Bolivian social security system, which was established in 1997. The proposal was sent to the Senate on October 10, 2008 and is expected to be approved by mid-November. [LATIN AMERICA/CARIBBEAN - Bolivia]http://www.watsonwyatt.com/search/parser.asp?ID=2001610/31/2008LATIN AMERICA/CARIBBEAN - BoliviaThe capacity of collective bargaining to negotiate working hours, overtime and paid time off has been broadened, according to a new law approved on August 20, 2008. Decision-making will now be facilitated by a collective labor agreement within companies or organizations, or by a branch agreement within industries. [EUROPE - France]http://www.watsonwyatt.com/search/parser.asp?ID=2001910/31/2008EUROPE - FranceThe Argentine government has moved to nationalize its private pension system, making Pay-As-You-Go the only system that will be available to the public for mandatory contributions. A bill was sent to Parliament on October 21, 2008, and is expected to be approved in November 2008. [LATIN AMERICA/CARIBBEAN - Argentina]http://www.watsonwyatt.com/search/parser.asp?ID=2000110/29/2008LATIN AMERICA/CARIBBEAN - ArgentinaA bill, expected to come into effect in 2009, will make employer discrimination based on race illegal in Hong Kong. The bill will be applicable to all employees, whether they are permanent, part-time or contract workers. Employees under commission-based and outsourcing arrangements are also covered. The bill was passed in July 2008. [ASIA-PACIFIC - Hong Kong]http://www.watsonwyatt.com/search/parser.asp?ID=1999010/28/2008ASIA-PACIFIC - Hong KongEffective October 1, 2008, pension funds in Italy will be obliged to provide potential clients with complete information about their plans before entering into signed contracts. The measure, approved by the Commission of Vigilance of Pension Funds (COVIP), aims to improve transparency and engender competition. [EUROPE - Italy]http://www.watsonwyatt.com/search/parser.asp?ID=1999110/28/2008EUROPE - ItalyThe implementation of the Tianjin Binhai New District pilot program has raised questions about the prospects of the supplementary pension insurance market in China. It is believed that the concerns of the State Administration of Taxation (SAT) stem from potential tax implications that may arise. Some definitive guidelines from the SAT and the Ministry of Finance can be expected. [ASIA-PACIFIC - China]http://www.watsonwyatt.com/search/parser.asp?ID=1999210/28/2008ASIA-PACIFIC - ChinaA sizeable cut in employers' social insurance tax was approved on August 27, 2008. The new rate will be 15 percent of monthly payroll. This move aims to encourage businesses to officially declare their workers as full-time employees, and eliminate much of the informality that currently characterizes the Albanian job sector. No change has been made with respect to employee contributions. [EUROPE - Albania]http://www.watsonwyatt.com/search/parser.asp?ID=1999310/28/2008EUROPE - AlbaniaIn a law passed in July 2008, the ceiling on social security contributions was removed, and the deduction allowed for pension contributions on the earnings base increased. These changes will come into effect from January 1, 2009. [EUROPE - Latvia]http://www.watsonwyatt.com/search/parser.asp?ID=1999410/28/2008EUROPE - LatviaA law regarding paid annual leave that has been in effect since January 1, 2008 has been clarified with new implementation measures. These new measures came into force on September 18, 2008. [ASIA-PACIFIC - China]http://www.watsonwyatt.com/search/parser.asp?ID=1993810/22/2008ASIA-PACIFIC - ChinaThe pre-tax contribution limit to 1165 (e) Saving Plans in Puerto Rico has been increased by a House Bill that passed on August 7, 2008. [LATIN AMERICA/CARIBBEAN - Puerto Rico]http://www.watsonwyatt.com/search/parser.asp?ID=1993010/21/2008LATIN AMERICA/CARIBBEAN - Puerto RicoOn October 14, 2008, the U.S. Department of the Treasury invested USD 250 billion in banks as part of the USD 700 billion bailout, which was approved by Congress and signed into law by President Bush on October 3, 2008. The measure also included an unlimited guarantee on bank deposits for small businesses by the Federal Deposit Insurance Corporation (FDIC) and a guarantee on senior bank debt by the Treasury Department. [UNITED STATES]http://www.watsonwyatt.com/search/parser.asp?ID=1999910/14/2008UNITED STATESA survey conducted in July and August 2008 found that many multinational HR functions are continuing to move work offshore in response to perceived global pressures. Many are also avoiding major action in favor of maintaining their status quo. [UNITED STATES]http://www.watsonwyatt.com/search/parser.asp?ID=2002010/9/2008UNITED STATESOn Oct. 3, 2008, President Bush signed the Emergency Economic Stabilization Act (EESA) of 2008 into law. Backed by USD 700 billion, the act is aimed at stabilizing American financial markets. The new law establishes the Troubled Asset Relief Program (TARP) and limits executive compensation in participating firms. [UNITED STATES]http://www.watsonwyatt.com/search/parser.asp?ID=1999810/3/2008UNITED STATESA new study has found that many older workers, and particularly those without employer-sponsored retirement plans or other financial resources, do not expect to receive their full Social Security or Medicare payments after they retire. Confidence is particularly low among those who are younger, female or have a lower level of education, according to a recent survey. [UNITED STATES]http://www.watsonwyatt.com/search/parser.asp?ID=198339/30/2008UNITED STATESRecent survey findings show that the vast majority of defined contribution (DC) pension plans in the UK have inadequate risk assessment and governance policies. However, there are also signs of an increasing focus on the importance of governance for these funds, according to a survey of 108 DC pension plans. [EUROPE - United Kingdom]http://www.watsonwyatt.com/search/parser.asp?ID=198209/29/2008EUROPE - United KingdomA new approach to selecting mortality assumptions to value defined benefit (DB) pension plans was finalized by the Pensions Regulator on September 23, 2008. The new approach will apply to valuations with effective dates from September 22 onwards. [EUROPE - United Kingdom]http://www.watsonwyatt.com/search/parser.asp?ID=198219/29/2008EUROPE - United Kingdom