Compulsory schemes could provide financial protection for employees

Mandatory schemes that include hardship support may be able to provide financial protection from economic distress caused by the Covid-19 (Coronavirus) pandemic, according to research from Zurich Insurance Group and the University of Oxford’s Smith School of Enterprise and the Environment.

The report, entitled Shaping a brighter future of work, has called for employers to consider mandatory provision of certain types of income protection insurance, such as coverage for disabilities and unemployment.

The research recommended auto-enrolment of employees in plans that offer basic income protection and participation in pension schemes. It claimed auto-enrolment could make a difference in helping people prepare for retirement across the world if a model similar to the one established in the UK is put into place and is successful.

Furthermore, the study noted that there have been calls for compulsory financial protection that have been raised in other countries such as Spain, where discussions are being held regarding establishing a UK-style model of auto-enrolment into pension plans and introducing compulsory savings programmes. The report also stated that talks are being held in the UK around making employer-funded sick pay compulsory.

David Henderson, Zurich’s group chief human resources officer, explained that employers are now dealing with concerns around training, reskilling and caring for their people.

He said: “This research looks at how leaders are prioritising and managing these issues, many of which were exacerbated by the pandemic.”

Henderson concluded: “To address these concerns, governments, employers and insurers can look to the report’s recommendations, which call for such strategies as offering incentives for participation in skilling programmes, helping employees prepare for retirement through financial education programs and auto-enrolment in pension plans, and conducting assessments of wellbeing activities to ensure they adequately consider employees’ physical and mental health.”