Offering retirement plans to employees can have numerous benefits for both the employer and the employee.
A retirement plan can help attract and retain top talent, improve employee satisfaction and loyalty, and provide a sense of security for employees’ futures. By providing a retirement plan, employers can demonstrate their commitment to their employees’ well-being and financial stability, leading to increased productivity and job satisfaction. Additionally, retirement plans can also provide tax benefits for employers and help employees build a nest egg for their golden years.
Cardinalstone Pension said that “a pension is a regular income paid to you after retirement, typically funded by contributions from either you and your employer, or your own personal contributions if you are an entrepreneur, freelancer, or small business owner with less than three employees. In Nigeria, these contributions go into a Retirement Savings Account (RSA), which is managed by a Pension Fund Administrator (PFA) like CardinalStone Pensions.”
On how pensions work in Nigeria, the company stated that “employer contributes a minimum of 10 per cent, and you can also contribute a minimum of eight per cent off your basic housing and transport allowance from your salary monthly.”
It added that “funds are invested in regulated instruments like stocks and bonds. Upon retirement or certain conditions (health-related treatments or injuries, or loss of employment for up to 4 months), you gain access to all, or 25 per cent of your Assets Under Management (AUM). Upon reaching the retirement age of 50 or later, you can have immediate access to your RSA.”
The group executive chairman of Lancelot Group, Mr. Adebayo Adeleke, stated that retirement planning is crucial for securing your future in Nigeria, ensuring financial stability during your golden years.
He noted that as the cost of living continues to rise, it is essential to prepare early and save diligently, explaining that retirement planning allows individuals to maintain their current lifestyle even when they are no longer working.
“Without proper preparation, retired Nigerians may face financial hardships, struggling to cover basic needs and medical expenses. Nigerians often encounter various challenges during retirement, such as inadequate pensions, high inflation rates, and limited access to healthcare services,” he stated.
Advantages Of Retirement Plans
Attract and Retain Talent: Offering retirement plans can help attract top talent and reduce employee turnover.
Employee Satisfaction And Loyalty: Providing retirement plans demonstrates an employer’s commitment to employees’ financial well-being, leading to increased job satisfaction and loyalty.
Tax Benefits: Contributions to retirement plans may be tax-deductible, reducing an employer’s taxable income.
Employee Financial Security: Retirement plans help employees build a nest egg for their golden years, providing financial security and peace of mind.
Increased Productivity: Knowing that their employer is invested in their future can boost employee morale and productivity.
Competitive Advantage: Offering retirement plans can set an employer apart from competitors in the job market.
Long-term Savings: Retirement plans encourage employees to save for the future, promoting long-term financial planning and stability.
Retirement planning is a crucial step toward securing a financially stable future. By setting clear goals, calculating your retirement needs, creating a savings plan, diversifying your investments, and monitoring your progress, you can work towards a comfortable retirement. Remember, starting early and seeking professional guidance can significantly enhance your retirement plans.
