The trick to make your employees finally understand their pension

Pension perplexity

In the modern workplace, ensuring the financial well-being of employees is increasingly recognized as a vital component of comprehensive employee benefit programs.

However, despite the importance of pensions, 62% of people in the Netherlands don't understand their pension (Wijzer in Geldzaken, 2022).

Pension can seem like a complex maze, covered in mystery and jargon. For many employees, terms like "defined contribution", "AOW" and "annuity" may as well be written in a foreign language. As a result, the significance of their pension contributions often remains obscured, lost in translation. This has a negative impact on your company.

Pension is one of the largest financial investments in your workforce

From your perspective as a company, offering a comprehensive pension plan is often one of the most significant investments you make in your workforce. However, without a clear understanding of pensions, employees may not fully appreciate the substantial financial commitment you've made on their behalf. An expensive missed opportunity.

How to make sure employees get it? Offer your employees holistic financial planning support

Understanding pensions is like solving a complex puzzle, but it becomes much easier when viewed in the context of their holistic financial situation. Just offering pension workshops by your pension provider will not do the trick, as you have probably noticed.

At the core, your decision to offer a pension plan stems from your commitment to support employees in building long-term financial security. But future financial security is not just about pensions—it's also about savings, investments, home ownership, and other financial aspects.

Just as each piece of a puzzle contributes to the overall picture, other financial elements play a crucial role alongside pension in securing a comfortable retirement.

By weaving pensions into the broader fabric of financial well-being, employees can gain a clearer understanding and make informed decisions to achieve financial security.

You can achieve this by offering your employees financial planning support alongside your pension plan.

The ripple effect: higher employee satisfaction and retention

When employees do understand the value of your pension contributions, it has a ripple effect throughout your organization. Appreciating the investment you've made in their future fosters a sense of loyalty and gratitude. As a result, employees are more likely to view you favorably, leading to increased satisfaction and higher retention rates.

In essence, valuing pension is not just about securing financial futures; it's also about strengthening the employer-employee relationship.

It’s your responsibility to get this right

As employers, it's your responsibility to ensure that your employees understand the value of the contributions in their pension. Not only a responsibility to your employees, but also and especially to yourself given the big financial investment of offering a pension. By breaking down the barriers of confusion and providing clear, accessible information about holistic finances, you can maximize the benefits of your pension contributions.

Equip: Your partner in financial planning

Equip is here to help you empower your workforce with holistic financial planning support. Our comprehensive platform offers employees access to independent financial planners for personalized guidance, cutting-edge financial planning tools and educational resources. Pension guidance, tools and education is a crucial component of our offering. Equip lets your employees look at their financial futures from a holistic perspective, ensuring that they understand the true value of your investment in their pension.

Want to learn more about how financial planning support is beneficial also for your older employees? Check out our blog: Navigating financial well-being at every age: The importance of support for older employees.