etermined to reduce their retirement benefits risk, global employers continue to move away from defined benefit plans.

    The need by multinational companies to better manage pension risk internationally is partly driven by government regulations, including those in the U.S., which require firms to follow stricter standards when accounting for pension assets and liabilities on the financial statements.

    In addition, business competitiveness is increasingly tied to the risks associated with a defined benefit plan, according to consultants.

    The degree to which employers offer these traditional plans varies around the globe. But even in nations where most pension assets are in defined benefit plans, companies are pushing to at least introduce hybrids that combine elements of defined benefit and defined contribution programs.

    Take the Netherlands, in which more than 90% of all pension assets are still DB. Because of strong social pressure from unions and others, a hybrid approach known as a collective DC plan tends to be the preferred route of many companies there. Collective DC plans vary, but they generally allow companies to negotiate a fixed amount of contributions annually.

    As a result, employees accept more associated investment risks. For example, if funding levels of the pension plan falls below a certain level because of market movements, employees may see their benefits reduced. Akzo Nobel NV, Amsterdam, and Royal DSM NV, Heerlen, were among the first to implement such programs in 2005 and 2006, respectively, and others have moved in this direction.

     "We have already seen the evolution from final-salary [DB] plans to career-average [DB] plans," said Jaap Maassen, vice chairman of the European Federation for Retirement Provision, Brussels.

     In addition, most of the career-average plans now have some form of conditional indexation, which are measures to link pension payments to inflation. "I don't know of any company that offers unconditional indexation any more," Mr. Maassen added.

     Moved by similar cost pressures, coupled with international accounting trends, U.K. companies have been further ahead in the conversion toward defined contribution plans.

     Some companies are taking more dramatic steps to move beyond traditional pension plans. They are paying insurance companies to assume partial or complete liability for their DB plans.

     From Jan. 1 to Sept. 10, about £5 billion ($9 billion) in pension liabilities were transferred to insurance companies from corporate sponsors in the U.K., according to data from Mercer LLC. That's nearly double the approximately £2.8 billion ($5.04 billion) in pension liabilities transferred in all of 2007.

     "The buyout market is very confined to the U.K.," said Kevin McLaughlin, a London-based principal in the financial strategy group at Mercer. "A lot of drivers are specific to the U.K., particularly around longevity developments. Most [U.K. DB] plans are closed to new entrants. Over time, they are confronted with legacy pension and compensation issues. Then you have big changes in the regulatory environment."

     Some trends in the pensions industry tend to follow developments in the general global benefits sector. A stronger focus on corporate governance is among them, said Christopher Mayo, senior consultant at Watson Wyatt Worldwide in London. The introduction of more flexible packages that combine pension with other benefits such as health care and holidays is becoming more common globally. Portability, both within and across nations, is another key feature.

     "As much as possible, multinational companies are looking to achieve some degree of consistency on an international scale," Mr. Mayo said.

     Such efforts are as pertinent in the pension industry as in other benefit areas. International Business Machines Corp., based in Armonk, N.Y., froze all its defined benefit plans in the U.S. as of Jan. 1, 2008, and moved employees into a beefed-up defined contribution plan. Overseas, where legal and social pressures discourage company officials to make similar moves, IBM executives have severely modified defined benefit plans. In the U.K., for example, IBM officials have reduced by about half the rate of growth in pensionable earnings while at the same time offering more incentives for employees to switch to hybrid plans.

     Hybrid plans vary widely. In general, however, they have lower guarantees and shift more investment risk to employees. IBM officials declined to comment for this article, according to spokesman Chris Steel.

     Cross-border pension asset pooling represents another major development among multinational companies in their efforts to achieve better consistency on a global scale. Under such a system, which consultants say can be expensive to implement, pension sponsors combine assets of plans from multiple countries to benefit from economies of scale and more efficient governance. IBM, for example, has implemented multinational asset pooling.

     The next step for these companies will be to combine asset-liability modeling, said Mr. Maassen, who is also senior vice president, international, at APG Groep NV, Heerlen, the asset manager for the e205 billion ($293 billion) Stichting Pensioenfonds ABP, also in Heerlen, and the e20 billion ($28.6 billion) Stichting Bedrijfstakpensioenfonds voor de Bouwnijverheid, Amsterdam.

    "This is one of the biggest challenges: not only to pool assets, but also liability," Mr. Maassen said. "To achieve this, there needs to be much better coordination [between countries] in labor legislation and taxation, among other social factors.