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Retirees Abroad: Managing Pensioners for Overseas Members

Simplifying Pension Administration

An increasing number of pensioners are choosing to spend to their golden years in a foreign country.
An increasing number of pensioners are choosing to spend to their golden years in a foreign country.

For many years, retirees followed a relatively traditional pattern: they stopped working from their long-term jobs and settled into post-work life in their home state or province. Fast forward to today and an increasing number of pensioners are choosing to spend to their golden years in a foreign country. Between 2007 and 2017, the number of American retirees living outside the U.S. increased by 40%. Canadians too are making the move abroad for their retirement. Though these numbers are significant, they represent a fairly small segment of a pension administrator’s total member base. Yet these individuals are some of the most difficult to process – and their numbers are climbing.

Where are most retirees moving?

First, it’s important to consider why retirees are leaving their home countries for new overseas locales. For many, money is the primary motivator. It’s no surprise that some seniors are under prepared for their post-working years, especially since North Americans are living longer than previous generations. The average Canadian now reaches the age of 82 and those celebrating their 100th birthday are increasing. In fact, a poll shows that retirement incomes are quickly shrinking due to debt and the high cost of living, making it likely that the trend of retiring abroad – where expenses can be cheaper – will grow.

This poses a challenge for pension funds as international payments management can be expensive and time-consuming. Most expat retirees from the US decide to settle in Canada, Japan, Mexico and Germany, among other countries. Globally, South American nations are becoming popular, with seniors flocking to Panama, Ecuador and Malaysia.

What are the biggest challenges for pension administrators face?

Processing payments in multiple currencies, not to mention answering overseas members’ queries, can monopolize the time of pension administrators. It’s not uncommon to encounter delayed or incorrect payments, which can cause additional hassle. Such issues could also be potentially damaging to a pension fund’s reputation.

The process can be difficult for members too. Though living abroad can come with significant cost savings, the nature of currency exchange means that a member’s final benefit amount can fluctuate depending on the month. In fact, one retirement guide advises that currency exposure is one of the biggest threats to overseas budgeting for expat retirees.

How to help make pensions easy for administrators

  1. Self-service: Consider allowing members to manage their own data and payments online. This can help reduce manual effort by pension staff as well as the possibility of errors in addresses, banking information and other details.
  2. Automate notifications: If members are notified once their payments are released, it may help reduce phone calls and other inquiries to the fund’s office.
  3. Reduce distribution lead time: Pension funds can improve their process and manage multiple payments/currencies through a single file upload. This helps ensure benefits arrive on time.

How to verify the identities of pensioners living abroad

Confirming the identity of a member outside the country can be challenging but the process is vital in helping prevent potential fraud. Our Global Existence Solution can help pension administrators with this task.

  1. Based on the retiree’s address, we identify a nearby WU(R) Agent location (there are over 550,000 worldwide)
  2. The member receives instructions on how to visit the Agent location and collect their payment
  3. Their identity is confirmed in person with valid identification and their funds are released

This process also helps identify potential overpayments and gives the option to suspend payments if necessary. You can seamlessly integrate your ERP software with the WU® GlobalPay platform.

For more information, contact one of our specialists.