For a long time, retirement was a far-off problem for staff and therefore for the HR director. The certainty of being able to take advantage of old-age free from need was even one of the main attractions of salaried employment. But apathy has given way to anxiety and so the HR director has to grasp the nettle. Until till now, talking about retirement, was like opening a Pandora’s box – discussions on deferred remuneration always leading to the thorny question of immediate income. But, the growing maturity and concern of employees around the subject of retirement, make this debate desirable and even indispensable within the company.
From collective anxiety to individual anxiety
The pension system is stumbling under the weight of demographics. The cause: longer life expectancy and the decrease in the number of people at work compared to pensioners. In 1970 there were three people in the population at work for one pensioner over 60. This figure is now 2.1 and should be close to 1.5 by 2050. While they wait for a possible extension in the duration of contributions, people in employment must, in any case, reckon with a rate of income replacement falling below 50% for managers at the end of a career without accident. A drop in income of which employees are not yet sufficiently aware. But, after denial, it is a cold shower that awaits them.
Dying too young or surviving your savings?
Employees also have no idea of their own life expectancy. Even after recent postponements of the retirement age, retirement will last, on average, 24 years for men and 29 for women. And what is more, tomorrow, with an average of 5 to 10 years of life in a situation of dependence. This would mean that the money put aside during your career could disappear all too quickly! What gave meaning to savings in previous years was leaving something for your children. Today, it is more a matter of organising oneself so as not to be a burden. As protection, the right measure would be to save as much for your retirement as for your principal residence.
Employees are worried, not very reactive and ill informed
According to a TNS Sofres study, 62% of 35 to 44 year olds see retirement as a cause for concern. But only 38% say they have started to make financial preparations for retirement. But as to where information on group retirement savings plans should come from, 57% say the employer followed by the banks and then the State.
Some HR directors are beginning to raise employee awareness of this issue. But, generally speaking, the issue is only raised when a voluntary savings scheme such as a Perco or article 83 is put in place, or 5 to 6 years before retirement when a pension audit is carried out. By then it is too late to react.
It is time for employees and employers to stop turning a blind eye to retirement. This well-earned rest is not a gift from heaven. It is built up, step by step, pay-slip after pay-slip, throughout one’s career. It is the responsibility of the employee, but also that of the employer.
>>> Our advice
Optional schemes such as the Perco or Article 83 defined contribution plans are excellent ways of communicating on the subject, particularly with regard to voluntary contributions. Making people aware of the need to take care of their retirement also highlights the company’s efforts in this field.
Furthermore, it is essential to draw the attention of employees to the statements of vested benefits (retirement points earned) issued regularly and offer explanations to help them grasp the issues.
Finally, why not offer pension audits much earlier, say for employees aged forty to fifty? With increasingly chaotic career paths and a confused impression that they will not enjoy the same benefits as their elders, employees need support more than ever.