June 5, 2020
When reading the title of this article, three reasons to investigate the benefits of group retirement schemes immediately come to mind:
- The government cannot afford social benefits for all retired people; employees look to their employers to assist them with financial support in times of need
- Many employees do not understand the need to provide for sickness, disability, death and retirement.
- The cost of insurance and retirement plans is often better if it is arranged for collectively.
A structured retirement fund can play an important part in the retirement provisions of employees. Not only will the retirement fund result in some form of “forced savings” but the tax savings on contributions and tax concessions at retirement are also incentives provided by the government that should not be ignored.
Although some governments set up assistance or social schemes for the aged, unfortunately such schemes often do not provide adequate income to cater for all their expenses once retired. It is therefore generally accepted that proper provision can only be made if money is set aside during the employee’s working life and retained in a separate fund.