Employees' financial wellness important – Independent Online

Wellness programmes should not be defined merely in terms of healthy living relating to things such as exercise, weight management and healthy eating, Jocelyn Hathaway, the chief operating officer of Sanlam Employee Benefits, says.

She says the traditional view of defining wellness has resulted in a lack of attention being paid to a critical area of the psychological well-being of employees: financial wellness.

“Financial stressors potentially play a far greater role in influencing employee psychological health and stress levels than the actual health stressors themselves, which are the traditional targets for employee wellness programmes.

“In the increasingly competitive business context, the success of companies is directly dependent on the ability of staff to deliver on their responsibilities, to innovate and to create wealth.

“Stress and ill health hamper the ability of staff to execute on their deliverables.”

Hathaway says the benefits of comprehensive wellness programmes are:

* Employees can lead physically, mentally and financially better lives; and

* Employers benefit through improved productivity and reduced absenteeism.

She says that the Sanlam Benchmark survey shows that 48 percent of employers have wellness programmes, but these are mainly of a traditional nature.

The research also reveals that 87 percent of respondents believe that it is the employer’s responsibility to enable good retirement outcomes for their employees.

She says employers are well positioned to positively affect the financial wellness of their employees, and this is also in their own best interests. Levers that employers can use include: providing appropriate funding mechanisms that allow lifetime wealth creation, such as retirement saving; structuring these mechanisms to channel financial behaviour towards better decision making; providing financial literacy education; and reducing financial stress by proactively engaging with employees about their financial pressure points.

RETIREMENT INCOME CALCULATOR

Do you want to know what percentage of your income you are likely to receive as a pension in retirement? Try Sanlam’s Day One Member Tool at the link below.

To use the calculator you will need to know your:

* Total guaranteed package for the year: the total before tax amount your company pays you, including any allowances and bonuses.

* Pensionable remuneration: The annual income on which your retirement fund contributions are calculated – this is typically your salary less any allowances and bonuses and is typically 70 to 80 percent of your total guaranteed package.

* You will also need to know what percentage of your pensionable remuneration you and your employer jointly pay as contributions to your retirement fund.

* If a portion of the contribution paid by your employer is used to fund group life benefits for you or to pay costs, you also need to enter this information.

The calculator will work out for you the percentage of your total income that you will receive as a pension in retirement if you continue to contribute at your current rate (your replacement ratio). It will make a suggestion regarding the level of your salary you need to make as a contribution to your retirement fund in order to achieve a pension equal to 75 percent of your income at retirement. You can adjust this targeted replacement ratio as well as your retirement age to see how this affects your income in retirement.

Sanlam’s Day One Member Tool


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