Employers, Here's How to Boost your Workers' Retirement Benefits
It's Worker's Day! And it's always beautiful to experience the bliss that comes with knowing that a day is dedicated to celebrating workers across the globe (in over 80 countries).
International Worker’s Day is also a day for employers to encourage their workers with words of affirmation, engaging activities and bonuses.
But in the middle of these, we should not forget that the retirement package of workers is as important as the present bonuses that they receive — perhaps even more important because, as we all know, no matter how hard and smart we all work right now, everyone will retire.
In that case, if you are an employer in Nigeria, you should know more about how you can boost your workers’ retirement benefits.
Why should you as an employer care about boosting your workers’ retirement benefits?
Here are a few reasons why you should care:
It will improve your organization's overall reputation
Top talents are not easy to get, contrary to a widely-held belief that it’s an employers’ market.
Recruiters will have you know that highly-experienced and highly skilled professionals are always particular about the reputation and culture of the company or organization they are interested in.
Talents of a high calibre will not just accept to work anywhere, they usually do their research and must consider you to be part of the top-rated workplaces to work for in the entire country before accepting your offer.
It is for this reason that every year, platforms such as Glassdoor, Jobberman and LinkedIn publish lists of the best workplaces to work for.
And to achieve this reputation, aside from creating a good and admirable work culture, you can also invest in increasing your workers’ retirement benefits.
2. It has the potential to entice top-tier professionals
As an employer, do you intend to attract top talent? Then, improving your workers’ retirement benefits is a good magnet that can entice them to work with your company which will boost the overall reputation of your company.
According to a recent survey, about 68% of workers across 10 countries in three major continents factor in pension and retirement benefits when considering a job offer.
3. Improved employee satisfaction and commitment.
62% of workers, according to this survey, have considered leaving their current employers in favour of another because they felt their retirement benefits packages were inadequate compared to those offered by the prospective new employer.
Therefore, to make your employees more devoted and feel satisfied with their jobs, a good way to go about it is to boost their retirement package benefits.
Now, here’s how to boost your workers’ retirement benefits to make them feel more valued and appreciated for their efforts.
Review 10% Minimum Contribution
Although the Pension Reform Act (PRA) 2014 states that employers are to contribute 10% of the employee’s monthly salary into the Retirement Savings Account (RSA) while the employee contributes a minimum of 8% into their account, it is not compulsory for you to stop at the minimum 10% contribution rate.
You can decide to increase your mandatory employer contribution to 15%. This is recognised under the law.
2. Cover the total Contribution
As an employer, you can also decide to cover the entire mandatory monthly contribution so that your workers do not have to contribute at all.
However, if you decide to do this, your contribution must not be below 18%. It must be from 20% upward. This is according to the guideline stated under the new PRA 2014.
3. Add gratuity, farewell package and thank-you allowance to the retirement package
Although employers are not mandated under the new Contributory Pension Scheme (CPS) approved by the National Pension Commission (PenCom) to pay gratuity to workers when they are set to retire, it is not forbidden for employers to pay gratuity in addition to other retirement benefits packages that can make workers feel more comfortable about their retirement in the near future.
This means that you are allowed to pay gratuity to your workers under the CPS should you decide to do so.
4. Encourage and approve additional voluntary contributions for workers
Section 4 (3) of the PRA 2014 allows workers to make voluntary contributions in addition to the minimum 10% and 8% contributions.
When a worker decides to make voluntary contributions, he or she must notify his or her employer in writing of his intention to make voluntary contributions and the amount to be deducted from his monthly salary.
According to the Labour Act of 1990, workers can contribute up to one-third of their monthly salary in the form of voluntary contributions to enhance their pension in retirement.
READ MORE ABOUT VOLUNTARY CONTRIBUTIONS: Why you Should Use AVCs to Save for a Comfortable Retirement
As an employer, you can encourage your workers to make additional voluntary contributions and also approve their request to make these contributions.
Oak Pensions Wants Workers to Smile into the Future
For every worker who is celebrating Worker’s Day today, you can comfortably smile into the future when you transfer your Retirement Savings Account (RSA) to a trustworthy and dependable Pension Fund Administrator (PFA) like Oak Pensions.
Employers, you can also show your workers you value them by encouraging them to register a Retirement Savings Account (RSA) with Oak Pensions.
Oak Pensions wants you to smile into the future and retire well — from today.
To register or transfer your RSA, call the Marketing Manager at 09087448661 or send an email to email@example.com.