Today, more than 30 percent of medium-sized Swedish companies have portions of their operations abroad. At the same time, it is not uncommon for international companies – often unbeknownst to – have difficulty complying with local regulations when sending employees abroad.
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According to Anna Svedman, Head of International Business at SPP Konsult, organizational errors may be due to the fact that the employer did not realize the meaning of the different forms of employment to enforce the rules. Or, it was simply overlooked that the arrival should have belonged to a specific collective agreement even during the expedition.
In practice, these situations can result in the company not being in compliance with existing collective agreements. This type of organization often leads to unnecessary administrative hassles, but it can also have financial consequences, she says.
The form of work governs
One of the reasons Swedish companies conflict with current regulations are errors in defining the form of employment. The form of employment is governed by the regulations that apply to affiliation with Social Security and determines, for example, the possibility to remain in the home country system, if one has to enter the host country system or find an international solution.
The first step for a successful external mission is to define a clear goal for the mission. Based on this, you can check the scope and duration of the broadcast required to achieve the mission purpose – that is, which employment form applies.
The country to which the envoy is sent also governs which regulations apply. For example, if a person is sent to a country within the European Union, EU Regulation No. 883/004, which regulates mobility in the internal market and affiliation with Social Security, applies.
Once the applicable regulations are determined, you can, based on this and the company’s pension policy, create a pension plan for the person sent abroad. Here, it is important to establish a clear structure for other insurances such as health insurance and other risk benefits. This reduces the risk of errors later on.
Bring outside expertise
To find your way through the jungle of regulations and processes, you can also enlist in outside expertise, says Anna Svedman. With the help of independent retirement advisors who specialize in issues related to international employees, you can reduce the administrative burden on your company, and avoid mistakes that lead to unnecessary costs and hassles.
We at SPP help more than you and your company create an attractive benefits package for your international employees as well. For us, it is only natural to be able to support and ensure a smooth process before, during and after the foreign broadcast.
Share SPP’s five steps to successfully solve the pension puzzle in global expansion
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