As per the study, employers are helping their employees plan for retirement, but they can do more.
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Employers have a vital role to play in raising the awareness of their employees about retirement planning, reveals a recent study by PGIM India Mutual Fund.
As per the study, employers are helping their employees plan for retirement, but they can do more. Only 46% of the private sector employees mention that they received frequent and sustained encouragement from their employer to plan for retirement. This number is 83% among public-sector employees.
Guidance from an employer can have a significant bearing on employee retirement planning. 88% of Indians say they would be at least somewhat motivated to plan for retirement if they got help and guidance in retirement planning from their employers, with 56% saying it would strongly motivate them to begin planning.
For employers, the upside of this is not just a more informed workforce, but also a more devoted one. 65% of Indians say getting retirement planning advice from their employer would make them more loyal to the organisation.
This mirrors the situation in other markets, too. According to a recent survey conducted by PGIM in Taiwan, 68% of survey respondents said it would be helpful to have their employers provide financial wellness programmes – and 77% said it would make them more loyal to the company.
Studies have also shown similar trends in the United States, as employees increasingly turn to employers as trusted providers of guidance and plans to achieve long-term financial security. A similar study done by PwC in US in 2016 said that 28% of employees believe that financial issues distract them at work and 28% of employees felt that financial stress affected their health.
There is a significant opportunity here for the Indian private sector employers. Besides the moral imperative to help employees, employers stand to gain significantly from facilitating the financial wellness of their employees. These programmes help companies attract and retain talent and boost productivity, and reduce employee stress.
Given that 54% of private sector workers in India have not had frequent retirement planning support from their employer, this is a great untapped opportunity for employers to build employee loyalty, and create a happier, more focused and more productive workforce.