More firms seen setting up retirement plans for employees

MANILA, Philippines — Security Bank Corp. expects a rise in the number of companies offering retirement programs next year and becoming part of the new normal as the country recovers from the recession brought about by the pandemic.

Carmela Lim, head of sales and account acquisition at Security Bank Trust and Asset Management Group, said it is important to have a retirement plan in place due to changing investment landscape and uncertainties brought about by the health crisis.

“The changing investment landscape is a good time to assess and review options for a company’s retirement fund. Here in Security Bank, there are many investment options available that would allow companies to grow their fund and receive good investment returns. We are happy to be of service to clients who need expert advice in this area,” Lim said.

E.M. Zalamea, Actuarial Services Inc. chief operating officer Raymund Benedict Zalamea talked about the importance of having a retirement plan for both employers and employees during a recently held webinar.

Zalamea said more companies have started offering employee retirement plans, specifically the defined contribution type which follows the retirement plans of other economies such as the US and Europe.

Zalamea pointed out that 40 percent of companies that have started their retirement plans set up a defined contribution type of fund as it engages employees more and encourages employee retention in the last five years.

“The fixed monthly contribution allows employees to see their fund growing inside the company. In the new normal, we can expect these numbers to continuously grow as companies further realize the need for such funds,” Zalamea said.

Data from the Philippine Statistics Authority (PSA) showed 20 percent of the 7.6 million senior citizens in the country are covered by either Government Service Insurance System (GSIS) or Social Security System (SSS).

This prompted Bangko Sentral ng Pilipinas Governor Benjamin Diokno to urge Filipinos to invest more as the 2019 Financial Inclusion Survey showed 75 percent or 54 million Filipinos do not have investments.

“The harsh reality is that eight out of 10 Filipinos aged 60 and above, and in many cases, retirees do not receive sufficient pension to fully cover their living expenses. Investments provide people the means to enhance their financial health, as well as to protect their welfare against economic risks and sudden downturns, such as this ongoing pandemic,” Diokno said.