http://www.watsonwyatt.com Latest Watson Wyatt Global News Briefs en-us Copyright 2005 Watson Wyatt Worldwide http://backend.userland.com/rss091 3/11/2010 1:10:29 PM 20 On November 25, 2009, the Personal Accounts Delivery Authority (PADA) published its findings from the consultation on potential investment approaches for the new person accounts plan into which millions of new pension savers will be automatically enrolled after 2012. [EUROPE - United Kingdom]http://www.watsonwyatt.com/search/parser.asp?ID=2280511/29/2009EUROPE - United KingdomOn October 22, 2009, the European Court of Justice pronounced in support of the overall parental leave framework by ruling in favor of an employee who claimed that compensation for dismissal should be based on full salary, rather than the reduced pay being received while the employee was on parental leave. [EUROPE - United Kingdom]http://www.watsonwyatt.com/search/parser.asp?ID=2280911/29/2009EUROPE - United KingdomSince October 19, 2009, pension fund administrators (AFPs) have been allowed to invest a larger share of their assets in foreign instruments, following a resolution by the Peruvian Central Bank. [LATIN AMERICA/CARIBBEAN - Peru]http://www.watsonwyatt.com/search/parser.asp?ID=2281711/28/2009LATIN AMERICA/CARIBBEAN - PeruDespite the economic turbulence of the past year and the high employer spend on benefits across the region, many organizations in Asia-Pacific still have not reviewed their benefits strategies, according to Watson Wyatt's “2009 Asia-Pacific Benefits Trends Survey Report.” [ASIA-PACIFIC - Peru]http://www.watsonwyatt.com/search/parser.asp?ID=2280711/27/2009ASIA-PACIFIC - PeruWorkmen's compensation has been increased effective November 6, 2009. As a result, insurance companies have announced that they may raise employer contributions. [LATIN AMERICA/CARIBBEAN - Argentina]http://www.watsonwyatt.com/search/parser.asp?ID=2281811/27/2009LATIN AMERICA/CARIBBEAN - ArgentinaThe Department for Work and Pensions (DWP) and the Personal Accounts Delivery Authority (PADA) have published their response to the public consultation on the rules governing personal accounts. Although no substantial policy changes are recommended as a result of the consultation, a few amendments have been made to make the policy intent clearer. [EUROPE - United Kingdom]http://www.watsonwyatt.com/search/parser.asp?ID=2281311/26/2009EUROPE - United KingdomSince November 3, 2009, sponsors of Nova Scotia-registered defined benefit pension plans have been able to amortize solvency deficits over 10 years instead of the current five, following an amendment of the Pension Benefit Regulation by the Ministry of Labor and Workforce Development. [CANADA - ENGLISH - United Kingdom]http://www.watsonwyatt.com/search/parser.asp?ID=2280811/23/2009CANADA - ENGLISH - United KingdomAs a result of legislation that was passed by Parliament on October 24, 2009, Peruvian workers above a fixed age who have been unemployed for 12 consecutive months will be eligible for early retirement effective January 2010. [LATIN AMERICA/CARIBBEAN - Peru]http://www.watsonwyatt.com/search/parser.asp?ID=2281611/22/2009LATIN AMERICA/CARIBBEAN - PeruChief executive officers at the nation’s largest companies saw the value of their company stock ownership plunge last year as the U.S. equities market declined, according to Watson Wyatt’s 2009/2010 Report on Executive Pay. [UNITED STATES - Peru]http://www.watsonwyatt.com/search/parser.asp?ID=2281411/19/2009UNITED STATES - PeruOn November 10, 2009, the Internal Revenue Service issued some relief for sponsors of hybrid pension plans, which provides some employers with a one-year reprieve to comply with forthcoming interest rate rules. [UNITED STATES - Peru]http://www.watsonwyatt.com/search/parser.asp?ID=2281511/16/2009UNITED STATES - PeruOn November 10, 2009, the Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS) delivered its final advice to the European Commission on the majority of areas covered by the first and second round of consultation papers for Solvency II Level 2 Implementing Measures. [EUROPE - Peru]http://www.watsonwyatt.com/search/parser.asp?ID=2280611/15/2009EUROPE - PeruWatson Wyatt has published an analysis estimating the volume of end-of-service benefit (ESB) obligations for Gulf Cooperation Council (GCC) member states. According to various scenarios analyzed, GCC employers could face an ESB liability ranging from USD 14.9 to USD 15.7 billion, depending on their employee turnover rate and service profiles. This represents over 20 percent of the wage bill in the region. [MIDDLE EAST - Peru]http://www.watsonwyatt.com/search/parser.asp?ID=2264510/31/2009MIDDLE EAST - PeruThe Minister for Financial Services, Superannuation and Corporate Law has announced an amendment will be made to tax law to provide transitional relief to superannuation funds. This announcement aims to clarify some uncertainties that have arisen as a result of the “Better Super” rewrite of the tax law regarding the deductibility of total and permanent disablement insurance premiums. [ASIA-PACIFIC - Australia]http://www.watsonwyatt.com/search/parser.asp?ID=2264310/30/2009ASIA-PACIFIC - AustraliaDuring their meeting on October 22, 2009, the International Accounting Standards Board decided not to introduce the proposed changes from their Exposure Draft, Discount Rate for Employee Benefits. [GLOBAL - Australia]http://www.watsonwyatt.com/search/parser.asp?ID=2262210/29/2009GLOBAL - AustraliaApproximately half of the companies that froze salaries and hiring in the past year now plan to unfreeze them in the next six months, according to the latest update to an ongoing series of surveys by Watson Wyatt on the effect of the economy on HR programs. [UNITED STATES - Australia]http://www.watsonwyatt.com/search/parser.asp?ID=2262610/29/2009UNITED STATES - AustraliaThe Federal Reserve has issued proposed regulations that would set "clear expectations" for banking organizations concerning their incentive compensation arrangements and related risk management and governance processes. [UNITED STATES - Australia]http://www.watsonwyatt.com/search/parser.asp?ID=2264810/29/2009UNITED STATES - AustraliaThe Department for Work and Pensions has published a further consultation on the proposed ‘personal accounts' regime, focusing on the requirement for employers to enroll all eligible employees into a ‘qualifying' pension plan. The consultation period of six weeks ended on November 5, and the DWP intends to lay regulations before Parliament for its approval by spring 2010. [EUROPE - United Kingdom]http://www.watsonwyatt.com/search/parser.asp?ID=2264210/28/2009EUROPE - United KingdomTo standardize the criteria of tax collection and ensure a fair taxation system, the State Administration on Tax clarified the regime on individual income tax in September 2009 by releasing a series of regulations. [ASIA-PACIFIC - China]http://www.watsonwyatt.com/search/parser.asp?ID=2262310/27/2009ASIA-PACIFIC - ChinaAssets managed by the world’s largest 500 fund managers fell by over 23 percent in 2008 to USD 53.4 trillion, down from USD 69.4 trillion the year before, according to the Pensions & Investments/Watson Wyatt World 500 Ranking. This fall in assets is the first since 2002 and the largest since the research began in 1996. [GLOBAL - China]http://www.watsonwyatt.com/search/parser.asp?ID=2263510/27/2009GLOBAL - ChinaDespite recent increases in asset values and regulatory relief from the Internal Revenue Service, U.S. employers will be required to contribute USD 88 billion into their defined benefit plans in 2010 and almost USD 145 billion in 2011 unless they receive funding relief from the federal government, according to a recent Watson Wyatt analysis. [UNITED STATES - China]http://www.watsonwyatt.com/search/parser.asp?ID=2263610/27/2009UNITED STATES - ChinaOn September 17, 2009, the pension fund supervisory authority (COVIP) published clarifying guidance for second-pillar pensions in the case of a transfer of a business division. In particular, if the new employer agrees through a collective agreement to continue contributing to the employee pension plan, employees cannot withdraw their accumulated termination indemnities (Trattamento di Fine Rapporto or TFR) from this plan. [EUROPE - Italy]http://www.watsonwyatt.com/search/parser.asp?ID=2262410/26/2009EUROPE - ItalyEffective September 28, 2009, the thresholds for pension funds' investment portfolios have been modified by the Brazilian government. This new regulation, which aims to reduce administrative costs and increase portfolio diversification, allows certain funds to be allocated to riskier investments. [LATIN AMERICA/CARIBBEAN - Brazil]http://www.watsonwyatt.com/search/parser.asp?ID=2264110/26/2009LATIN AMERICA/CARIBBEAN - BrazilEffective October 1, 2009, employers’ total social security contributions are required to be paid gradually, within three fiscal years from the company’s incorporation. [LATIN AMERICA/CARIBBEAN - Uruguay]http://www.watsonwyatt.com/search/parser.asp?ID=2264910/26/2009LATIN AMERICA/CARIBBEAN - UruguayEffective September 19, 2009, male workers are entitled to four consecutive paid days off when their wife or partner gives birth. [LATIN AMERICA/CARIBBEAN - Peru]http://www.watsonwyatt.com/search/parser.asp?ID=2265010/24/2009LATIN AMERICA/CARIBBEAN - PeruThe new Social Security Contribution Code, which was published on September 16, 2009, will bring about significant changes to the determination of earnings that are subject to social security contributions. The new taxable base will include several types of allowances and expenses, such as travel allowances and representation costs (if predetermined). [EUROPE - Portugal]http://www.watsonwyatt.com/search/parser.asp?ID=2262510/23/2009EUROPE - PortugalThe Office of the Superintendent of Financial Institutions released its proposed disclosure guidelines for federally-regulated defined contribution plans on September 16, 2009. The guidelines include detailed requirements for the disclosure of eligibility, contributions, investment options, plan expenses, benefits and termination procedures, and is open to comment until December 31, 2009. [CANADA - ENGLISH - Portugal]http://www.watsonwyatt.com/search/parser.asp?ID=2264410/23/2009CANADA - ENGLISH - PortugalEffective August 1, 2009, pension and health care contributions have increased for both employers and employees. [LATIN AMERICA/CARIBBEAN - Dominican Republic]http://www.watsonwyatt.com/search/parser.asp?ID=224269/30/2009LATIN AMERICA/CARIBBEAN - Dominican RepublicOn September 30 2009, the Pension Protection Fund published its draft Determination setting out how pension protection levies will be calculated for the year beginning April 1, 2010. Its proposal to cap risk-based levies at 0.5 percent of a plan’s liabilities will increase levies for approximately 90 percent of employers but allow the remaining 10 percent, who the PPF thinks pose the most risk, to pay less. [EUROPE - United Kingdom]http://www.watsonwyatt.com/search/parser.asp?ID=224439/30/2009EUROPE - United KingdomA new labor law that grants companies incentives to hire workers by reducing their costs of employment was approved on August 19, 2009. [EUROPE - Turkey]http://www.watsonwyatt.com/search/parser.asp?ID=224469/30/2009EUROPE - TurkeyEffective July 1, 2009, an amendment to the ANI (Accord National Interprofessionnel) has provided workers leaving an organization with the option to keep the health insurance and pension benefits that were provided to them during their period of unemployment. [EUROPE - France]http://www.watsonwyatt.com/search/parser.asp?ID=224489/30/2009EUROPE - FranceNew requirements for organizations to establish themselves as Pension Fund Administrators (AFPs) were approved by the Superintendence of Pensions on July 31, 2009. The resolution aims to protect benefits by ensuring only financially viable AFPs are established. [LATIN AMERICA/CARIBBEAN - Chile]http://www.watsonwyatt.com/search/parser.asp?ID=224249/29/2009LATIN AMERICA/CARIBBEAN - ChileOn September 23, 2009, the European Commission adopted draft legislation to strengthen the supervision of the European financial sector by creating two new regulatory bodies: the European Systemic Risk Board and the European System of Financial Supervisors. [EUROPE - Chile]http://www.watsonwyatt.com/search/parser.asp?ID=224229/28/2009EUROPE - ChileTotal assets of the world’s largest 300 pension funds fell by 13 percent in 2008 to USD 10.4 trillion, down by around USD 1.5 trillion from last year’s figure, according to recent research conducted by Pensions & Investments, a leading U.S. investment newspaper, and Watson Wyatt. Despite last year’s fall in assets, compound annual growth during the past five years is still around 10 percent. The region with the highest compound annual growth rate (CAGR) during this period is Asia-Pacific (19 percent) and the lowest is North America (4 percent). [GLOBAL - Chile]http://www.watsonwyatt.com/search/parser.asp?ID=224449/28/2009GLOBAL - ChileA Watson Wyatt poll has found that a vast majority of employers anticipate that, if enacted, health care reform will lead to higher health care costs and weaken their role in providing coverage to workers. [UNITED STATES - Chile]http://www.watsonwyatt.com/search/parser.asp?ID=224459/25/2009UNITED STATES - ChileNearly half of U.S. companies are automatically enrolling workers into 401(k) plans to encourage them to save for retirement, according to a recent survey by Watson Wyatt. The survey also found that the number of companies that use target-date or lifecycle funds as their default investment option has increased sharply in the last few years. [UNITED STATES - Chile]http://www.watsonwyatt.com/search/parser.asp?ID=224479/24/2009UNITED STATES - ChileEffective July 1, 2009, employers will be responsible for contributions to Survivor and Disability Insurance (SIS). These contributions were formerly paid for by employees. This change, a result of the 2008 Pension Reform Law of 2008, currently only applies to companies with 100 employees or more. [LATIN AMERICA/CARIBBEAN - Chile]http://www.watsonwyatt.com/search/parser.asp?ID=224239/23/2009LATIN AMERICA/CARIBBEAN - ChileThe Argentinean Supreme Court has ruled that all benefit payments that are made to employees in kind should now be considered part of the worker’s salary and acknowledged when calculating severance pay. [LATIN AMERICA/CARIBBEAN - Argentina]http://www.watsonwyatt.com/search/parser.asp?ID=224259/21/2009LATIN AMERICA/CARIBBEAN - ArgentinaEffective August 16, 2009, Sunday rest rules have been changed to allow companies to open stores on Sunday in tourist areas and in cities of over a million inhabitants. [EUROPE - France]http://www.watsonwyatt.com/search/parser.asp?ID=224589/18/2009EUROPE - FranceOn July 24, the Japanese government approved a proposal that will increase the tax-deductible limit for employer contributions to corporate defined contribution plans. This change will become effective on January 1, 2010. [ASIA-PACIFIC - Japan]http://www.watsonwyatt.com/search/parser.asp?ID=221428/31/2009ASIA-PACIFIC - JapanOn July 17, 2009, an ordinance that amended the Mandatory Provident Fund (MPF) Scheme was gazetted after being passed by the Legislative Council. This ordinance, which provides members with a greater choice of MPF service providers and enhanced portability of accrued benefits, aims to promote market competition among MPF providers and encourage employees to take a more active interest in their MPF investments. [ASIA-PACIFIC - Hong Kong]http://www.watsonwyatt.com/search/parser.asp?ID=221968/31/2009ASIA-PACIFIC - Hong KongOn August 20, 2009, the International Accounting Standards Board (IASB) published an Exposure Draft setting out its proposal to remove the IAS19 requirement that discount rates used to calculate pension accounting liabilities be based on government bonds in countries where there is no “deep market” in corporate bonds, such as Sweden, Norway, Australia, South Africa, Korea, and Hong Kong. [GLOBAL - Hong Kong]http://www.watsonwyatt.com/search/parser.asp?ID=221978/31/2009GLOBAL - Hong KongOn July 20, 2009, President Medvedev signed a set of modifications that introduce new investment options for the Russian state pension fund as well as non-state pension funds that invest mandatory defined contribution accruals. The amendments broaden the range of investment instruments available to pension funds, allowing them to invest in corporate bonds, foreign currency deposits and mortgage bonds. [EUROPE - Russia]http://www.watsonwyatt.com/search/parser.asp?ID=221988/30/2009EUROPE - RussiaOn July 7, 2009, the Australian Securities & Investment Commission (ASIC) issued a Class Order providing relief to superannuation fund trustees and their authorized representatives who give personal advice to members about their existing interest in their funds. [ASIA-PACIFIC - Australia]http://www.watsonwyatt.com/search/parser.asp?ID=221418/28/2009ASIA-PACIFIC - AustraliaStarting in September 2009, all firms registered under the United Arab Emirates' Labor Ministry will have to make wage payments through the new Wage Protection System. [MIDDLE EAST - United Arab Emirates]http://www.watsonwyatt.com/search/parser.asp?ID=221738/28/2009MIDDLE EAST - United Arab EmiratesA new Watson Wyatt survey has found that corporate pension funds have been making numerous changes to their investment programs in response to the economic crisis. Some of these changes include significantly reducing target equity allocations and shaking up fund manager lineups. However, relatively few funds have taken steps to better plan and implement risk strategies or lower costs. [UNITED STATES - United Arab Emirates]http://www.watsonwyatt.com/search/parser.asp?ID=221378/27/2009UNITED STATES - United Arab EmiratesNew Watson Wyatt research has shown that half of U.K. companies with defined benefit pension plans expect to have closed them to all employees by 2012. [EUROPE - United Kingdom]http://www.watsonwyatt.com/search/parser.asp?ID=221588/27/2009EUROPE - United KingdomThe latest update to a Watson Wyatt survey about the effect of the economy on HR programs in Latin America has found that most companies have been affected, and some are still making changes to counteract the effects of the economic crisis. Some of the actions taken include reducing the budget for salary adjustments, instituting a hiring freeze and undergoing a company restructure. [LATIN AMERICA/CARIBBEAN - United Kingdom]http://www.watsonwyatt.com/search/parser.asp?ID=221998/27/2009LATIN AMERICA/CARIBBEAN - United KingdomEffective March 2010, new members will be allocated to fund administrators in Chile's second-pillar pension system through a bidding process. The regulation, which was passed by the Superintendence of Pensions on July 30, 2009, will allocate new members to the Pension Fund Administrator (AFP) that offers the lowest commission at the time. It is hoped that this will encourage competition between AFPs and lower barriers to entry for new administrators. [LATIN AMERICA/CARIBBEAN - Chile]http://www.watsonwyatt.com/search/parser.asp?ID=221368/26/2009LATIN AMERICA/CARIBBEAN - ChileEffective July 1, 2009, the government amended Superannuation Guarantee (SG) regulations to confirm that employers do not have to pay SG contributions for some types of leave, including parental and “community service” leave. [ASIA-PACIFIC - Australia]http://www.watsonwyatt.com/search/parser.asp?ID=221408/26/2009ASIA-PACIFIC - AustraliaStarting in August 2009, eligible employees can choose to receive their employer's social security contributions as part of their monthly salary payments. [LATIN AMERICA/CARIBBEAN - Ecuador]http://www.watsonwyatt.com/search/parser.asp?ID=221718/26/2009LATIN AMERICA/CARIBBEAN - Ecuador