As Singapore’s population rapidly ages and life expectancy significantly increases, employers’ role in helping their workforce adequately to plan for their retirement and being more proactive to facilitate retirement readiness that could drive employee engagement is coming under scrutiny.
A recently conducted Aon Hewitt survey on Retirement & Financial Wellness for Singapore Employers 2015 reveals there are still large gaps in current retirement provisions.
The Aon Hewitt survey participants representing multiple industries and organisation sizes, covering more than 37,000 employees have indicated that Singapore employers generally do not offer supplementary retirement plans.
While 71% of the population comprising of Singapore citizens and Permanent Residents are eligible under the Central Provident Fund (CPF) scheme only about one in twenty companies offer arrangements to supplement the CPF mandatory contributions.
Three out of four companies in the survey do not offer retirement benefits to foreign employees, favouring cash allowances instead of more long-term financial protection.
The Aon Hewitt survey revealed that around half of the participants consider their companies’ current retirement support to be ineffective in retaining and attracting the right employees.
Employers perceive that approximately 50% of non-CPF eligible employees, executives / high earners and those reaching retirement age are provided with ineffective retirement support.
See: 59% of Singaporeans believe in job loyalty: Survey
Singapore employers are becoming increasingly aware that the current status quo is not sustainable. While ‘Financial cost’ ranks as the primary concern for the survey participants, their focus in the next 12-24 months is to review their retirement arrangements. Managing benefits compliance and governance risk is also a concern.About 25% of employers in Singapore are stepping up to assist their workforce by providing avenues for financial wellness. These company-wide programmes and resources typically include encouraging more savings for retirement and financial goal setting, among others.
Shikha Gaur, Executive Director for Aon Hewitt’s Retirement and Wealth Management business in Singapore said, “Though most Singapore employers are still playing a passive role in supporting and encouraging employees to save for retirement, moving forward, we are seeing more employers implementing financial wellness programmes to help employees save enough for their retirement. This allows employees to feel less stressed, be more engaged and productive.”
From a company point of view, Dimitris Efthyvoulou, Senior Consultant, Aon Hewitt added, “Many companies are beginning to support financial wellness and retirement provision programmes so as to differentiate themselves, and increase their ability to attract and retain talent, and thus gain a sustainable business advantage.”
Also read: Singapore’s retirement system increasingly sustainable: Study
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