Retirement Readiness: Should Employers Play a Bigger Role in Helping Employees Prepare?

Whether it’s stress about work, the economy, personal finances, or managing one’s health and relationships, Singaporean employees are buffeted by almost-daily stressors that can impact their health and distract them from succeeding at work.

60% of the working population in Singapore are not adequately prepared for retirement and 69% are not confident they can retire comfortably, according to a retirement survey by Syfe. Can workplace solutions that help address these retirement inadequacies and financial stressors, by providing relevant retirement-support, be what employees need to enable them to thrive?

The Gap Between Knowing And Doing 

Many people know that it is important to save and invest regularly in order to amass an adequate nest egg for retirement. It is a topic that is covered extensively by financial blogs and self-help websites which is then readily consumed by readers, as supported by our findings showing that 55% of working adults turn to such sites for advice.

However, while it seems like many have a good grasp of financial literacy, the data shows that this knowledge is not being put to action. About one-third of Singapore employees do not invest at all and this finding is supported by the fact that 43% of all assets are still held as cash in savings accounts. Despite the availability of various savings and investing products and services in Singapore, as well as the wide range of content available from books, financial blogs, newspapers, seminars and more, it seems that a worrying number of the working population in Singapore either don’t invest or don’t do so regularly. 

Barriers for Employees When it Comes To Regular Investing 

One obstacle to regular investing for the employee could be the often unclear costs to get started. This together with the common misconception that you require a large amount of money to start or subsequently add to your pot, paralyses most employees. For instance, a minimum order size of 100 stocks is required per trade on the Singapore exchange. Outside of Singapore, more well known global stocks can often be more expensive. A single share of Amazon stock, at this time of writing, is worth close to USD$2,000.

Lack of diversification aside, this means regular investors will have to set aside a considerable sum of money, plus any transaction fees, each time just to acquire their shares. For people who may want to start investing with a smaller sum or regular amounts, to align with their monthly pay packet, such difficulties can present a significant barrier. 

Aside from the practicalities, many are also overwhelmed by the sheer number of investing options to know where to begin. Because they don’t know where to start, many may put it off, thinking it can wait for later. Employees may also find it challenging to apply investment advice to their own unique financial situation or find the whole idea intimidating.

Furthermore, choosing a broker, opening a brokerage account, and filling out a variety of paperwork can be overbearing. For time-pressed workers busy with other commitments, this inconvenience can add to the inertia. 

How Should Employers Help Employees Save For Retirement?

Workplace programs that enhance employee retirement savings can be a powerful tool for many employees to regain their retirement confidence. Employers are in a unique position to offer this because employees tend to perceive them as a more trustworthy source of information. Workplace savings programs offer employers a low cost, hassle-free alternative to a full retirement benefit where employees can easily access targeted retirement related support and tools for them to take action. 

Further employee support in the form of financial wellness programs certainly play a crucial role in helping employees manage their financial stressors and plan for the future. From a company perspective, offering such innovative benefits can support employee engagement initiatives, as well as attract and retain talents. Moreover, offering employees an additional way to save for a secure retirement is likely to alleviate employees’ financial stress, making them less distracted and more productive at work. 

Helping Employees Prepare For Retirement Doesn’t Have To Be Expensive And Difficult

Over the past few decades, technology has been the major driver of workplace changes, reshaping where and how employees work. With the advent of digital wealth management platforms, employers now have the opportunity to offer financial wellness and retirement related support beyond the traditional approaches. 

For example, Syfe’s technology enabled workplace savings and retirement programs are more affordable and easier to manage compared to traditional International Pension Plans or Section 5 schemes. Employers can take advantage of a fully digital platform to significantly reduce the tediousness of paperwork, setting up such plans, onboarding employees and managing the plans thereafter. Employers can also tap on the financial education programs available to help employees better understand their finances and plan for their retirement.

Employers are in a unique position to encourage and empower employees to plan ahead and become better prepared for retirement. Reducing employee financial anxiety can lead to significant benefits for employers, from reduced absenteeism to stress-related healthcare claims to greater employee engagement.

To start realising these benefits in the workplace, speak to us to find out how Syfe can complement your existing employee benefits with customised workplace programs.