Tag Archives: Spain

How are defined benefit plans in the UK affecting southern European companies?

Private sector defined benefit (DB) pension plans are uncommon in Spain and Italy. However, DB plans remain an important issue for companies in the United Kingdom. They can have a significant effect on the financial performance of multinational companies.

MBW International, Milliman’s joint venture with Barnett Waddingham, recently analysed 20 multinational companies in Spain and Italy with around £51.7 billion of UK DB pension liabilities between them. The analysis by Isabel Coles and Andrew Vaughan considers the effect UK DB pensions are having on the companies that make up the Spanish IBEX 35 and Italian FTSE MIB indices. The authors look at how funding levels have changed and consider developments in three important areas: assets and investment risk, benefit payments and cash contributions. They also discuss how these companies are addressing the challenges posed by their pension obligations.

To download the report, click here.

International M&A deals can benefit from independent actuarial valuations

A Milliman client, a global information technology (IT) company, acquired an operation in Spain. Along with the acquisition came the operation’s local retirement program, with its associated assets and liabilities, including a defined benefit (DB) pension obligation.

As part of the acquisition process, an actuary—appointed by the seller—carried out an actuarial valuation of the existing local retirement liability. Not long after the acquisition, the company asked Milliman to carry out the actuarial valuations for accounting purposes, covering operations in several countries.

To read more about the work Milliman did—and to learn why expert international actuarial advice is so important for successful global M&A deals—see Dominic Clark’s article here.