Employers need to improve retirement benefits planning, report says

More flexible and people-focused retirement planning needed.

Hong Kong employers need to be more flexible and people-focused when planning retirement benefits as industry landscape reforms, according to AON’s report.

Around 47% of the employers do not offer voluntary Mandatory Provident Fund (MPF) contributions, while the half who do tends to link contributions to year of service.

This makes employees less likely to achieve retirement adequacy especially as living costs increases, said the report.

Employers are encouraged to pay more attention on fees when choosing retirement provider’s rather than just focusing on returns, as higher fees can burden or even reduce employees net gain.

Moreover, new regulations on long service payments and the introduction of electronic MPF platforms will increase costs for employers, forcing them to adjust their benefit plans.

As financial education and digital tools advance, the importance of financial wellness continues to grow.

The report points out employers need to put more effort in helping employees planning their retirement benefits so they can build a more loyal and productive workforce.

In addition, Employees are encouraged to consider Occupational Retirement Schemes Ordinance although it is declining, as they have better contributions comparing with MPF.