Workers prefer firms offering retirement benefits

More Filipino employees prefer working for companies with a good employee retirement plan, but only one in five local firms have the capacity to do so, according to a recent survey by Mercer.

In its latest Retirement Survey Report, Mercer said employers are seeing the lack of pre-retirement support as a growing concern as “more employees prefer to work for organizations that also take care of their financial wellbeing.”

It is deemed a concern because the survey revealed that “only one in five companies in the Philippines prepares their employees well for retirement.” In addition, one in four companies also have never held activities that educate the employees about retirement benefits despite the majority of them saying such is crucial.

About 31% of the local firms also do not provide formal retirement plans. They only offer workers the statutory minimum benefit.

“While it is primarily the individual’s responsibility to ensure their own retirement readiness, employers can lead by providing essential tools, training and technology to engage employees in their long-term financial wellbeing,” said Harold Tan, Mercer’s wealth business leader in the Philippines.

“This includes offering a more flexible set of benefits so employees can fully maximize them and reduce their out-of-pocket expenses, which can improve savings.”

He urged employers to “increase personal financial planning awareness during bonus seasons to build a culture for preparing and risk-proofing the future.”

Citing the Bangko Sentral ng Pilipinas, Mercer noted that more Filipinos made voluntary contributions last year to their Personal Equity and Retirement Accounts (PERA).

The value of PERA contributions grew by 62% to P237 million in September 2021 from P144 million a year ago. A total of 4,001 individuals made the contribution during the same period, the majority or 70% of which were full-time employees.

“While it is encouraging that workers have more investment product choices to grow their own savings for retirement, pension schemes now play an integral role in their decision of whether to stay with their current company or move on,” Mercer said.