Nissan Motors has appointed Mercer as their global retirement consultant for the second year running. Under the relationship, Mercer will advise Nissan on pension governance all over the world. This move will not only strengthen the business relationship between Nissan and Mercer Japan, but will also provide an opportunity to further the partnership between Nissan's overseas subsidiaries and Mercer globally.

In recent years, Nissan has implemented a strong global governance structure to better manage its exposure to pension plans around the world. Under this program corporate headquarters established global guidelines around how subsidiaries should manage their pension obligations, and any change to the existing plans need to be reported to and approved by corporate headquarters. This marks the first time such a program has been attempted in Japan.

As a part of this initiative, Mercer will support Nissan in ensuring smooth information flow by providing a report summarising the activities and services that the firm has provided to Nissan's subsidiaries around the world.

Commenting on Mercer's appointment, Kazuhiko Ishikawa, Japan business leader with Mercer's retirement, risk and finance business, said: "At Mercer, we deliver innovative solutions for our client greatest people challenges. Nissan Motors is a forward-thinking company, and we are delighted to build on our long-term relationship."

He further added, "The global pension plan environment has changed significantly due the credit crunch. This coupled with a shift in the foreign exchange rate, has left Japanese multinationals heavily exposed to potential funding losses in their pension plans abroad. The most apparent impact of such losses will appear on their consolidated financial statements; however the mid- to long-term implications include an increase in deficit contributions and a review of investment strategies. Increasingly, companies in Japan will need to make important decisions to overcome these challenges."

Chaired by Nissan's COO, Toshiyuki Shiga, Nissan's Pension Committee first named Mercer their global retirement consultant in 2008, recognising the organisation's excellent business partnership with Mercer and the firm's continued high-quality service.

Shintaro Kitano, senior actuary and account manager for Nissan, added, "After an extensive period of evaluation, we decided to sign Mercer to support our global pension governance program for the second year running. This relationship continues to pair Nissan, a pioneer in the automobile industry, with Mercer, a world-renowned consulting pioneer."

"Nissan's initiative to strengthen the global governance structure around pensions and other benefits requires not only the timely collection of information in order to ensure an effective decision-making process. Given the degree of turmoil witnessed during the credit crisis, we also require a proactive approach that will help identify any additional challenges well in advance," he further commented.

According to Mercer's 2006 Global Governance Survey, around 96% of Western multinationals said they have at least some level of a global governance structure for their pension programs around the world. This trend is not yet common in Japan however, where local pension managers are usually delegated full responsibility to manage local plans.

With the survey hinting at an increasing need to have a global governance sector and given the increasing importance of examining pension risks to the consolidated corporate accounts, Japanese multinationals must consider concrete action to tackle these emerging issues in the future. The forthcoming convergence/adoption of the pension accounting process with International Financial Reporting Standards will only increase the focus on consolidated pension risk. As such, the renewal of Nissan's relationship with Mercer is a highly strategic initiative that will streamline their global governance structure and better manage the company's exposure to pension plan risk around the world.