Hymans Robertson has launched a three-year initiative aimed at helping corporates address the adequacy of their employees’ retirement savings.
The project aims to prepare businesses for shifts in the retirement space as well as support employees in retiring comfortably and safeguard long-term business resilience.
The key aims of the project include helping employers navigate retirement adequacy challenges, raising awareness of their responsibilities, mitigating business risks, adapting to changing policy and market conditions and aligning retirement strategies with broader corporate goals.
Research from Hymans Robertson reveals that 35 per cent of UK companies already recognise a role in supporting employee retirement adequacy, a figure expected to rise. Those that fail to act risk operational challenges, such as delayed retirements, workforce planning issues, reduced productivity, and increased HR and financial pressures.
Upcoming regulatory developments, including the potential growth of Collective Defined Contribution (CDC) schemes and innovations in the Defined Contribution (DC) market, mean that businesses must remain agile and informed says Hymans.
Hymans says companies can future-proof their workforce strategies, stay ahead of regulatory and market changes and gain a competitive advantage by taking action now.
Hymans Robertson head of corporate consulting Leonard Bowman says: “From our annual survey of UK companies, 35 per cent of employers believe that the responsibility for ensuring employees have a suitable retirement income sits with them. Whilst this is already a sizeable proportion of UK companies, we expect that percentage to climb dramatically over the next few years. We believe the proactive role of companies in addressing adequacy in retirement will be fundamental to the UK retirement landscape over the coming decades. As a firm, we’re committed to supporting businesses through this transition, ensuring they are well-prepared to cope with the changes and continue to thrive.
“Critically, as employees approach retirement with inadequate retirement savings, this will increasingly cause serious issues for employers. Employees will be forced to make undesirable decisions around their retirement and employment patterns, with both wide and far-reaching consequences for UK corporates.
“At the same time, we know that the Government policy will evolve and will almost certainly impact companies in unforeseen ways. On the bright side, with momentum continuing to build around CDC and growing innovation in the DC market, better and more efficient solutions are emerging all the time. Corporates must be in a position to make informed decisions around these changes.
“What this all means is that companies need to engage today in regard to the issues coming down the road, in order to be in the best possible place to align their corporate strategy with what is coming. Our call to action is driven by a belief that companies need to be at the heart of any solutions, and must avoid being caught out in a few years’ time by what could be quite seismic changes to the UK retirement landscape.”