Finance, banking sectors show the most interest in pension plans

About 142 IPPs and ISPs were established over the last five years.

Only 16% of International Pension Plans (IPPs) and International Savings Plans (ISPs) were established in the past five years, with significant interest from the banking and finance sector, representing one in seven new plans, revealed WTW.

Other sectors with notable interest include oil and gas (12%), non-profit organizations (11%), and engineering and power (11%).

WTW’s International Pension Plan Survey 2024 revealed a trend to extend IPPs and ISPs eligibility to local employees, particularly in politically and economically challenging countries. 

One in four IPPs and ISPs established in the last five years caters to local employees. Trusts are the preferred vehicle to protect savings from local turbulence, including high inflation.

Interest in ESG considerations is rising, with nine out of eleven providers reporting increased switching to ESG funds. 

About 58% of plans offer ESG funds, and 34% comply with minimum ESG standards. Providers prioritise diversity, equity, and inclusion (DEI) initiatives within IPPs and ISPs.

Governance around IPPs and ISPs remains relatively low, with only two in five plans reporting to a governance committee. 

Despite market volatility, robust governance structures are essential for monitoring plan performance and ensuring regulatory compliance. 

Over three-quarters of providers are involved in revising governance frameworks, with many contributing through training and education for trustees and members.

About 142 IPPs and ISPs were established over the last five years, primarily in banking and finance. 

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More than three-quarters of IPPs/ISPs are domiciled in the Isle of Man or Luxembourg. There is growing interest in setting up IPPs or ISPs exclusively for local employees, with the number of such plans doubling from 54 in 2019 to 126 in 2024.

Economic and political instability, along with high inflation, challenge employers to provide stable pension/savings arrangements. 

IPPs and ISPs offer more secure vehicles by accessing global investment funds and using hard currencies like USD, GBP, and EUR, protecting members from currency devaluation.

Around three in five plans offer ESG funds, with increased interest in reviewing fund ranges for ESG considerations. Providers focus on DEI initiatives, gender-neutral plan designs, and financial wellbeing for employees. Shariah funds, which align with responsible investment principles, are also becoming more popular.

IPPs and ISPs require stronger governance frameworks, particularly in volatile markets. Providers are enhancing governance through revised structures and educational initiatives. This ensures plans meet objectives and comply with regulatory requirements.

The survey, covering 1,028 plans from 960 organisations with $19.5b in assets, highlights the evolving landscape of IPPs and ISPs.

The survey underscores the need for comprehensive data, robust governance, and ESG considerations to optimise compensation strategies and ensure long-term success for multinational employers.