Global News Briefs provide information on compensation and benefit issues from around the world that are important to your organization.
On June 24, the President signed the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010 into law. The act restores cuts in Medicare reimbursements to doctors and makes available relief for pension plan funding for years through 2011 and certain benefit restrictions for 2010. July 2010
On July 14, the Departments of Health and Human Services, Labor and Treasury (IRS) issued interim final regulations on certain preventive services that group health plans and insurers are required to cover under the PPACA. Plan sponsors that want to learn more about the regulations and how to access the lists of preventive services that are covered should read Towers Watson’s analysis. July 2010
On June 16, 2010, the French government issued a press release detailing its plan for reforming the retirement system, aimed at achieving financial equilibrium by 2018. July 2010
On June 25, the Greek government approved pension reform to increase the minimum number of years worked that are required for retirement, modify pension benefit calculations, increase disincentives for early retirement and cut pension benefits and bonuses. July 2010
A draft of a new pension bill that the Egyptian government submitted to Parliament on June 9, 2010 proposes a gradual increase in retirement age from 60 to 65, effective beginning in January 2012. July 2010
In June, the Internal Revenue Service (IRS) and the Departments of Labor (DoL) and Health and Human Services (HHS) released two sets of interim regulations addressing various issues under the Patient Protection and Affordable Care Act (PPACA). July 2010
The government has increased the ceiling on the gratuity benefit from INR350,000 to INR1,000,000. The change, which was effective May 24, 2010, is likely to lead to increased costs for many employers, particularly because it also applies to benefits already accrued with the current employer. June 2010
Earlier this year, the government published regulations intended to ease the financial burden under the existing requirements for a cash injection to an underfunded pension plan in the event of restructuring within a group of companies. However, there are strict and complex restrictions. June 2010
A survey conducted by Towers Watson in May 2010 provided an early temperature check on employer reactions to the Patient Protection and Affordable Care Act (PPACA), the health care reform legislation recently enacted in the U.S. June 2010
On May 2, 2010, the Australian government released its response to the Henry tax review, in which it adopted only a few of the review’s recommendations. The main change proposed, an increase in the Superannuation Guarantee (SG) level, was not one of the Henry review’s recommendations. June 2010
A Towers Watson survey of 110 major Canadian employers, released in April, indicates that about 52% view the current pension funding crisis as something that will be a long-term feature of the landscape rather than a temporary state of affairs. June 2010
Starting in 2012, Singapore employers will be required by law to offer reemployment to workers who have reached the current statutory retirement age of 62. Rather than raise the retirement age, the government has formulated this legislation as a more flexible way to extend employment to older workers, initially to age 65 and later to age 67. June 2010
A recent survey conducted by Towers Watson indicates that the switch from defined benefit (DB) plans to defined contribution (DC) plans is continuing in the U.K. Most DB plans have already been closed to new members, but only some of those have also stopped the accrual of new benefits; the proportion of sponsors taking this second step is expected to grow. June 2010
The International Accounting Standards Board (IASB) has issued an Exposure Draft (ED) of proposed changes to IAS 19, Employee Benefits. The proposals could have an adverse effect on some plan sponsors’ financial reporting by increasing costs and liabilities, increasing volatility in some areas and adding to the disclosure burdens for those with defined benefit plans. May 2010
Despite the economic downturn, the average maximum contribution that employers are making to defined contribution (DC) plans is increasing, which underscores the continued growth of DC arrangements in the UK. This is the key finding of the sixth Towers Watson survey of companies in the FTSE 100 index. May 2010
The 2010 Quebec Budget, which was tabled by the Minister of Finance on March 31, 2010, introduces several new taxes on employees and on financial institutions. May 2010
Sanctions will now be enforced against employers who practice gender discrimination in terms of salary, career development, benefits or any other aspect of labor or retirement. The law, which implements a European Parliament directive to enforce the principle of equal opportunities and equal treatment of men and women in matters of employment and occupation, became effective February 20, 2010. May 2010
In March, 2010, the Irish government issued a National Pensions Framework Document. The document is a broad statement of intended future policy; detailed legislation will be required to implement the policies outlined. May 2010
An increase to the scope of tax restrictions on pension savings for high earners will go ahead as planned, despite industry protests. In its March budget, the U.K. government confirmed that the extension announced in December 2009 would proceed. Enabling legislation was included in Finance Act 2010 and rushed through before the U.K. Parliament was dissolved for the general election. May 2010
A new Circular was recently issued by the State Tax Bureau in China clarifying the individual income tax (IIT) treatment to enterprise annuity plans (EAPs). May 2010
The retirement age will gradually increase for both men and women starting in 2017 and will reach age 65 by 2026, according to pension reform legislation approved by the Estonian Parliament in April. Retirement age is currently 63 for men and 60 for women. May 2010
Retirees in Mexico who receive aggregate pension benefits that amount to more than nine times the minimum wage will now be taxed on those benefits, the Ministry of Finance announced in February 2010. Legislation to this effect has existed since the Income Tax Law (ITL) of 1979 was enacted (see Section 109 Fraction III), but has not been enforced until now. This will affect retirees with pension benefits over MXN 16,000, or about 2% of all retirees. April 2010
A recent study by Towers Watson has found that the most generous pension plans sponsored by large employers in Switzerland pay out roughly twice as much in retirement benefits than the least generous ones. The study also found that there are large disparities in pension structure, and that financial companies tend to provide the richest pension benefits on average — especially for higher-paid employees. March 2010
Starting January 1, 2010, contributions to retirement plans offered by financial institutions are not income tax-deductible. This decision was taken by the Tax Administration Superintendence (SAT) on the grounds that the Financial Services Law does not include “pension funds” or “retirement plans” as authorized services. March 2010
In an effort to encourage healthy behaviors, a growing number of employers are tightening their requirements for workers to receive financial incentives, according to a survey conducted by Towers Watson and the National Business Group on Health (NBGH), a nonprofit association of large U.S. employers. March 2010
The Spanish government has proposed a number of changes to address changing demographics in the labor force. These include an increase in retirement ages, gradual reductions in Social Security benefit amounts, and reform of Social Security disability and spouses’ and orphans’ benefits. In addition, there are proposals that would affect the employer-employee relationship as a worker’s career reaches its end. March 2010
In March, the United States enacted comprehensive health care reform (HCR) legislation. A key objective of the new law, which will be phased in over several years beginning in 2010, is to extend health care coverage to many previously uninsured individuals. As a result, the legislation affects a variety of stakeholders in the current health care system, including providers, health insurers, employers and employees. March 2010
The 2010 Federal Budget was tabled by the Canadian Minister of Finance on March 4, 2010. Although the Budget primarily continued the federal government’s stress on economic stimulus from the 2009 budget, it also included measures relating to Employment Insurance (EI), stock-based compensation rules and information regarding upcoming consultations on Canada’s retirement system. March 2010
A new update of the collective agreement for Italy’s industrial managers introduces significant changes to pay, welfare provision and supplementary pension coverage. The November 2009 agreement was reached between the employers’ confederation Confindustria and the managers’ association Federmanager. Part of the agreement became effective January 1, 2010, and the remainder goes into effect in July of this year. March 2010
Global institutional pension fund assets in the 13 major markets (P13) increased by 15% during 2009, from US$20 trillion to over US$23 trillion, according to Towers Watson’s Global Pension Assets Study. The growth is in sharp contrast to the 21% loss in asset values in 2008, and brought assets back to 2006 levels. March 2010
As a result of an Ontario Court of Appeal (OCA) ruling, partial wind-ups may now be ordered in Ontario when a significant proportion of a subset of members of a pension plan is terminated. This ruling results from a case brought before the OCA involving Hydro One, which elected not to declare a partial wind-up regarding 79 terminations it had made following a restructuring. February 2010
Effective April 1, 2010, employer contributions to bridge pension allowances and other forms of early retirement will be standardized and increased. February 2010
The 2010 Social Security Funding law published on December 28, 2009, effectively doubles the taxes employers pay on defined benefit (DB) pension plans. The new law also creates a 30% contribution payment that is applicable to all pensions that exceed eight times the Social Security Ceiling (SSC).
February 2010
A bill introducing a series of amendments to the taxation of employee share schemes (ESS) was approved by both Australian Houses on December 2, 2009, and received Royal Assent on December 14, 2009. The changes remove the option to defer tax on shares purchased under a qualifying ESS and are retroactive to July 1, 2009. February 2010
A section of the Social Welfare and Pension Act of 2008 has been brought into effect as of February 1, 2010, that requires employers to arrange periodic training for their pension plan trustees. As a result of this new requirement, both employers and trustees can be fined if a trustee fails to undertake appropriate training, and trustees can be subject to an on-the-spot fine. February 2010
In recently issued regulations, U.K. authorities have set timetables for when employers of different sizes must automatically enroll employees in work-based pension plans with employer contributions. The U.K. government also has said it will look again at what employers with defined contribution (DC) plans must do to comply with the new laws. January 2010
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