Willis Towers Watson’s latest survey “Global Benefits Attitudes Survey” has revealed that 58% of Hong Kong employees have developed a growing interest over the preceding two to three years on retirement security. But only one-third of respondents were optimistic towards a financially comfortable retirement future.
“Employees expect their employers’ retirement plans as their primary way to save for retirement, but not all employers are willing to take on proactive responsibilities for employee financial wellbeing beyond statutory retirement contributions,” said Elaine Hwang, head of retirement at Willis Towers Watson.
About 44% to 45% of the surveyed employees in Hong Kong are willing to sacrifice a portion of their pay cheque for greater employer-provided retirement benefits, and to make similar trade-offs for more generous benefits. When it comes to health care benefits, only 30% are willing to pay more each month for a more generous healthcare plan.
In contrast to late retirement, employees are expressing a strong interest in phased retirement. Over half (54%) of the respondents said they would keep working for sometime before fully retiring. Stronger interest is observed in highly engaged employees and those from the age groups of 40-plus.
“Phased retirement seems to be an excellent idea for both employers and employees. While employers may transition duties and knowledge through a smoother and more gradual process, employees can also leverage on this opportunity to continue to contribute to their employers while take a chance to become more adaptive to retirement life,” Hwang said.
“Phased retirement programmes are not uncommon in Hong Kong. Having said that, we observe that employers may not have a holistic programme in place, and as a result, the contract terms and benefits items are not adequately established.”
Eric Lam, head of MPF Advisory Services at Willis Towers Watson, suggested employers play a more crucial role in enhancing member engagement and encouraging savings in today’s changing political climate.
An employer’s first step is to run regular reviews on MPF providers on their performance and services such as proactively assessing whether their employees are being provided with the optimal retirement investment opportunities and services based on their different needs and life stages.
This effort can result in motivating employee engagement and strengthening employer branding. It has been observed that employees are more engaged if employers can offer more than one MPF scheme to address the needs of different employees, especially the wide difference of investment knowledge of employees.
“It’s time to rethink the role of employers in helping employees save or invest wisely for retirement by providing adequate education, guidance and tools,” Hwang concluded.