The Reason So Many People Are Comfortable With Their Futures So Unsecure
Pension is a prickly subject for most companies to address, however pensions need not be the proverbial elephant in the room that everyone ignores. We look at some reasons that companies may have for not having an occupational plan for their employees and hope to alay some of their misgivings.
- NAPSA contributions are enough – One of the major reasons most companies do not sign up for an occupational pension fund is because they feel their contributions to the government instituted pension management authority is enough to provide a sense of security to their employees. However, this may not be the case. Employees often appreciate having a second option available to them as it gives an even greater sense of security as they feel the returns on their pension investments will be greater. A private pension scheme typically pays more than the required statutory percentage and is often matched or exceeded by a small margin by the employer. This adds a sense of confidence and trust that you the employer has the best interests of your employees at heart.
- Having a pension will be expensive – Another reason is that the company will be spending too much on another pension scheme for employees, thereby increasing their operating costs. If properly managed, by a professional and competent fund manager, your expenditure will not seem such a burden, but will actually work as a long-term investment. Pensions are typically invested in various instruments that are meant to give you profitable yields in the long term. Some of this can be used to pay out your employee’s retirement benefits and the rest can be pooled into other company projects or investments.
- You fear not having full control of the fund – The fund is set up in such a manner that you have your interests protected first. You and the fund manager can come with an agreement that all stakeholders are comfortable with.
- You are not sure if your fund is legitimate or a scam -Pensions fund managers have to be registered by the Pensions and Insurance and Insurance Authority(PIA) who oversee their every activity. Should your scheme not be able to provide proof of that, you are not safe.
- It’s easier to deal with short term contracts and gratuity as opposed to providing pension – It may seem like a great cost effective measure to have contracts instead of permanent or pensionable jobs. But in the long run without a proper plan for either of those plans, you will be setting yourselves back more financially as you are constantly spending more in training new staff members and paying off others whose contracts have ended. A pension scheme provides you greater flexibility and control of your budget by helping you plan better in the long term.
- Not sure what type of scheme to offer – Your fund manager can help you decide what works for you and your overall company budget. There are typically three types of plans a fund manager can help you set up for your employees. These are namely a defined benefit plan, a defined contribution plan or a mix of the two.
Speak to us today to find out how we can help you.