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Planning for employee retirement requires an individual effort, but it also involves companies properly handling their contributions, and projecting their workforce’s success in the long term.
According to the OECD, the retirement age may show a two-year increase across all countries by 2060. In such a scenario, you can expect new regulations to emerge and new strategies to mitigate issues.
In plenty of countries, whether employees have access to retirement savings depends largely on an employer’s ability and willingness to sponsor a retirement plan. Many employers recognize that offering retirement plans can be valuable for attracting and retaining top talent.
However, providing such plans comes with costs, often requiring the assistance of financial experts to manage and administer investments. Despite these expenses, employers have various strategies available to minimize costs while enhancing retirement security for their employees.
These plans can help you attract and retain top talent by demonstrating a commitment to employees’ long-term financial security, making your company more competitive in the job market. A well-structured retirement plan can help you boost team meber morale and productivity, as your workers will feel valued and secure in their future.
Trends in global retirement
In the US, research shows that the “Gen Z super savers” are prioritizing retirement benefits and saving more money earlier, affecting what jobs and companies they are looking for.
Around the world, retirement ages vary significantly, reflecting economic and social policies tailored to each country’s workforce and life expectancy. This means that employers need to stay flexible and up-to-date, especially when managing a global workforce.
One major country debating employee retirement plans, is China. Starting in 2025, the country has decided to raise its retirement age for the first time since the 1950s. With this action, the government hopes to alleviate a pension crisis as the huge elderly population expands.
Such changes in China show an important global trend in adapting the workforce lifespan to demographic pressures, such as life expectancy and a declining birth rate in developed countries.
Employee retirement plans for companies: 5 aspects to keep in mind
With a well-rounded approach, companies can support their employees’ retirement journey while securing their own future success. Here are some tips:
1) Start early with employee retirement plans
You should encourage employees to start planning for retirement as early as possible. Understanding tax implications and the benefits of savings can make a difference in the long run.
Many global companies offer 401(k) matching programs, where they contribute a percentage of the employee’s savings. This incentivizes employees to save while providing them with additional financial security.
2) Speculate benefits
Healthcare is a significant concern for employees planning retirement. Employers can support their teams by offering health benefits or providing access to healthcare information.
Some companies offer continued healthcare benefits to retirees, while others might partner with insurers to provide cost-effective health plans.
3) Embrace technology to aid retirement planning
Digital tools can help you and your employees manage retirement planning more effectively. There are various tools available that employees can use to estimate their savings needs, plan their investment strategies, and track their progress.
If you want to integrate employee retirement planning features, HR management software can streamline the process of tracking when employees are eligible for retirement and managing benefits.
4) Foster a positive intergenerational culture
It’s important to have a dynamic approach to this subject and create a positive and intergenerational culture with your team.
When you have different age groups working together, you generate diversity, which studies show has an overwhelming positive effect on companies.
A Randstad study showed that “86% of the global respondents prefer working in a multi-generational team”. Additionally, other studies show that 83% of global business leaders recognize that multigenerational forces are key to growth and long-term success.
For example, If your company is made up mostly of millenials, then you will only get a millennial point of view.
5) Consider global workers
If you employ a global workforce, you need to be mindful of specific retirement plans and regulations in each country. Different regions have their retirement laws, which include pension schemes, contribution requirements, retirement ages, and tax implications.
Partnering with an employer of record (EOR) can help manage the legal and financial intricacies of global employee retirement plans. They can provide you peace of mind by offering in-depth knowledge of local laws and managing cross-border retirement benefits and regulations.
How Employers of Record can help
An employer of record (EOR), sometimes referred to as an international PEO, works for companies as a third-party services provider. An EOR help you tap into international talent pools by hiring and managing professionals on your behalf.
Additionally, EORs can go as far as being a regular outsourced part of your HR management and global payroll processes. In this way, EOR assists with local pension schemes and handles changes in legislation, such as the recent case of China.
An EOR can manage multiple pension programs with different setups from their streamlined platforms. This is especially important if you also want to plan for your company’s scalability, which may include an ever-growing international team.
Unlock your global potential, such as transferring pension benefits and requirements between nations, in case you need to move team members to other countries. Furthermore, an EOR can coordinate retirement counseling or financial education for employees, ensuring they understand their entitlements and saving options.
Contact us to get more information.
If you like this article, you will also like our Q&A with Brazilian longevity expert Eliane Kreisler as we discuss age discrimination in the workplace.
