The majority of respondents (68%) to the Employee Benefits/Close Brothers Pensions research 2014 do not have any staff at or nearing retirement in the next 12 months.
This perhaps explains why more than half (55%) of respondents do not offer staff support at retirement; the associated issues aren’t at the forefront of employers’ minds.
Many employers have reservations about providing at-retirement support because of the blurred boundary betweenfinancial guidance and advice , which employers are prohibited from offering.
Employees also need to consider how they will cope with any existing or potential health concerns.These issues range from the type of lifestyle employees envisage leading at retirement, whether they have sufficient retirement savings to fund this, how they plan to access their savings as and when they need them and what they plan to spend these on, be that on a retirement home, an annual cruise around the Caribbean, or both.
But the risks that may arise as a result of employers doing nothing could potentially be worse.
Firstly, there is the risk of litigation. Uninformed employees make for unprepared employees in search of someone to blame for their poor standard of retirement, and employers are sure to be first on their hit list.
Secondly, workforce planning strategies are based on an assumption that staff will, at some point, retire. But, for many staff, this date could be far later than an employer anticipates if they have insufficient savings, an issue that could have been addressed well in advance of their planned retirement date through some basic financial education and support .
Gone are the days when employees expect fully funded benefits support (although this is always nice when it is offered). Very often, they simply want employers to facilitate access to the benefits they require.
Finally, employers risk failing to comply with The Pensions Regulator’s requirement for employers to, at the very least, communicate employees’ retirement options to them ahead of their retirement. This is not much to ask, particularly in light of employees’ years of service.
Clare Bettelley
Associate Editor
Employee Benefits