The Reason So Many Companies Are Comfortable With The Futures Of Their Staff 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 of shocking reasons many people don’t have a pension scheme 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 NAPSA. Many feel their contributions to the 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. It gives an even greater sense of security as they feel the returns on their pension investments will be greater.
A private pension scheme will typically pay more than the required statutory percentage. In addition it 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. Pension managers typically invest in various instruments meant to give you profitable yields in the long term. Some of this is used to pay out your employee’s retirement benefits and the rest is pooled into other company projects or investments.
Fear of not having full control of the fund
Among the other shocking reasons many people don’t have a pension scheme is fear of how their fund will be controlled. Your fund manager will set it 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.
Concerns your fund may not be legitimate
Pensions fund managers are all 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.
Short term contracts and gratuity seem more attractive
It may seem like a great cost effective measure to have shorter term contracts instead of permanent or pensionable jobs. Long term, without a proper plan for either option, you will be setting yourselves back more financially. This is when you factor the cost of training new staff members and paying off others whose contracts have ended. A pension scheme provides you greater flexibility and control of your budget. This is by helping you plan better in the long term.
Not sure what type of scheme to select
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.
Do you fall in any of the reasons many so many people and companies aren’t preparing for their future. Speak to us today to find out how we can help you.