The majority of employers recognize the need to revise HR strategies to ensure employees achieve retirement adequacy within the next two years. Key survey findings highlight this recognition.
- A recent survey by the Reward and Employee Benefit Association (REBA) reveals that current pension contributions do not meet employee needs, prompting a potential restructuring.
- Almost half of the surveyed employers view inadequate pension contributions as an immediate concern, while many anticipate adjusting to legislative changes soon.
- The survey indicates an overwhelming 89% of employers are likely to implement new HR strategies to address retirement adequacy.
- Most employers are consulting pension providers and specialists to enhance education and engagement strategies for better retirement outcomes.
A comprehensive survey by the Reward and Employee Benefit Association (REBA) underscores a growing concern among employers regarding the sufficiency of current pension contributions to secure favorable retirement outcomes for employees. The survey results suggest an urgent need for employers to reevaluate their pension strategies to align them with employees’ future financial security.
Nearly 47% of employers perceive inadequate pension contributions as a present challenge, while 28% foresee addressing this issue in the near future. These insights point towards an imminent shift in workplace pension policies.
Notably, 89% of the survey participants express their likelihood of altering HR strategies within the next two years, to meet retirement adequacy targets. Many employers anticipate potential legislative modifications to auto-enrollment minimum contributions, further influencing their strategy adjustments.
Despite a statutory minimum contribution of 3% to 4.99%, anticipated contribution levels reflect a progressive outlook with 17% planning to offer this rate soon. By 2026, as many as 19% of employers envisage contributing 10% or more to their employees’ pension plans.
Employer strategies extend beyond heightened contributions; a significant emphasis is placed on improving pension education and early engagement among employees. Almost all employers seek to optimize support from pension providers, and 78% are engaging consultants to devise effective engagement strategies.
Jo Gallacher from REBA emphasizes that while contributions are pivotal, enhanced education and strategic engagement are crucial to ensuring retirement adequacy while maintaining organizational financial health.
Ant Donaldson from Wolseley highlights the dual focus on immediate financial stresses and long-term retirement planning. He comments on the necessity of a robust pension strategy that balances both short-term financial needs and long-term retirement security.
Employers are proactively adapting HR strategies to enhance retirement adequacy, acknowledging the critical role of education and contribution increases.
