Mars, which manufactures brands such as Pedigree, Dove and Snickers, set up an international pension scheme for its globally mobile senior managers in 2008.
The scheme, based on a design incorporating both a defined contribution (DC) and defined benefit (DB) pension, is in two parts. Employees put contributions into the DC section, which is managed by Boal and Co in the Isle of Man, while the employer-funded section of the IPP is based wherever the employees are based. This part of the scheme is not subject to typical local pension tax rules because it is unapproved and therefore not tax qualified.
Hung Tran, international benefits and control manager, Europe, Middle East and Africa (EMEA) at Mars, says: “We put the money (employer contributions) aside. We do not physically put the money in to be invested. We set it aside and we give a guaranteed return on it, so it operates like a bank account. It is not invested anywhere; it is basically sitting on the company’s balance sheet.”
Mars contributes 10% and matches what an employee puts in by 1.5% up to a maximum of 9%. This means that Mars puts a maximum of 19% into the scheme, which currently has about 20 members.
“Previously, we provided a lot of DB benefits where there was not the requirement for our members to contribute,” says Tran. “All the risks sat with the company. We moved away from that model because we believe the sharing of risk is actually more appropriate.”
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