Employers face multiple challenges in 2025 including economic volatility, a slowing hiring market, persistent skill gaps, and the need to adapt to technological shifts like AI and changing workforce expectations around flexibility and well-being.
Increasingly, employers are utilising international pension and savings schemes to aid recruitment and retention in a climate of uncertainty and against a backdrop of employees now moving within or between organisations and locations in less predictable, non-linear ways.
There are three key drivers powering this growing trend for SME employers:
- Technology – enables SME employers to operate an international footprint and staff population more easily.
- Globlisation – once the purview of multinationals, digital innovation allows SME companies to engage with a global marketplace across a wide range of new and existing sectors.
- Changing expectations – the younger populations dominating the workforce are more demanding. They are also less likely to work for one company or in one location and want variety, development and choice.
This brings opportunities as well as challenges to human resources compensation and benefits professionals, whose teams are generally shrinking even while their role becomes ever more complicated.
Company-sponsored international pensions and savings plans are a tried and tested solution for stabilising a workforce, as well as delivering on duty of care to employees and gaining efficiencies and economies of scale. They have been used for decades by multinationals and the non-profit sector.
An international plan is a set of building blocks that can be tailored to your needs. It allows you to determine eligibility, either a narrow fit for particular employees out of scope for your existing local benefits, or it can be written broadly to be expanded to other populations.
Who can go in this type of plan?
Internationally mobile employees – employees that are either moving around your international footprint or those that want the freedom to travel and work remotely. An international plan allows them to enjoy a consistent and consolidated benefit that they can carry with them, allowing you to attract and retain their expertise.
Expatriates – for employees that will be based in a country for the medium to long term and who are not therefore paying into their home country pension system. If they are not intending to retire in the country they are working in, an international plan allows you to deliver on your duty of care while allowing them to save and make the most of their time working overseas.
Offshore – often these populations fall foul of local benefit eligibility, so an international plan allows you to treat these employees equitably with your onshore employees and retain their experience.
Local nationals – it may be that you have employees in a country where there are no local benefits, or they are not considered sufficiently robust. You can provide an additional tier international plan to compliment any domestic scheme, providing your employees with a meaningful benefit in hard currency.
Critical or specialist staff – whether it’s key members of your local leadership or specialist staff in short supply that you need to retain, you can create an additional international plan to attract and keep personnel and gain a reputation as an employer of choice.
What else can it do?
An international pensions and savings plan delivers simplicity, efficiency and economies of scale. As an employer, you can harmonise the benefits across your international population or customise it for different populations. You will only deal with one provider and have one plan, rather than several small separate local schemes with different rules, making life easy for HR and more cost effective.
You can tailor the rules to suit. For example, the employer contribution can be tiered based on service or seniority. Or you can include ‘vesting’ by specifying how long someone needs to be in your employment before gaining the rights to their benefit. If they don’t complete the time, the value of your employer contribution will revert back.
You can also add a voluntary savings element, normally at no extra cost, enabling employees to save easily from payroll for medium to long-term life events. And because it’s an international plan, it offers portability. You can move employees around your global footprint, giving them the variety and career opportunities they seek, whilst keeping them within your company.
The good news is that this type of plan is simple to create and easy to administer because it’s a paperless digital solution. It removes the headache from HR and helps you to keep the people you’ve hired, trained and invested in within your business.
Sovereign’s international pensions and savings plans are based in Guernsey, which is an established centre of excellence for the establishment, administration and management of international retirement benefit plans.
Guernsey operates a modern and principles-based regulatory regime and offers a tax neutral environment in which the assets of a scheme can grow free of taxation and, on drawdown, are paid to scheme members gross. It became one of the first jurisdictions in the world to regulate the providers of pension schemes in 2001 and introduced pension scheme rules to further enhance member protection in 2017.
To find out more about Sovereign’s international pensions and savings plans, contact Occupational Pension & Savings Executive Jo Smeed below.
