Staff expect retirement support from companies

Professionals in Singapore rank financial well-being as a top priority but most don’t know where to start

Staff expect retirement support from companies

Employees in Singapore ranked retirement planning as their top priority but an alarming 80% don’t know how much they really need to retire. Many are seeking support from their employers to secure their financial well-being. However, retirement support has been lacking, according to a new study.

Other challenges include a lack of transparency in financial or investment options at the company as well as a lack of education or awareness – employees were found to pick short-term gains over long-term stability in most instances during the length of their careers.

The positive side of things is that employers recognised the shift in employee expectations. Aon found that close to 40% of employers ranked offering financial well-being strategy as their highest priority, followed by emotional and mental well-being support.

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The study also showed that seven in 10 employers have plans to offer financial well-being programs at their organisation throughout 2021. Leaders said these programs are critical to sustain employee engagement and remain attractive to potential talent.

“Forward-looking companies first need to understand the financial worries of their employees and identify the gaps in their benefits offering,” said Alicia Brittain, senior consultant & actuary, retirement & investments, Singapore at Aon. “The most effective approaches are aimed at changing individual behaviours towards money and savings.”

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Unfortunately, Aon found that employees in Singapore generally lack guidance on a financial strategy. Less than a third of firms in Singapore currently offer their employees an investment choice in their retirement plans. This leads to employees selecting their own personal investment channels. They may lack experience in understanding investments, which can lead to misallocating their money and result in inadequate retirement savings.

“Employers can have a significant impact on how much their employees save by instilling smart habits and healthy money behaviours,” said Ashley Palmer, regional managing partner, retirement & investments, Asia at Aon. “The right long-term savings vehicles, effective communications and financial tools will help Singapore's workforce be more financially resilient in the wake of the COVID-19 pandemic.”

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