Pensions – a fundamental part of well-being programmes (Sponsored)

Oct 02, 2018
Pension schemes and financial health should be central to employee well-being programmes according to Zurich’s Head of Corporate Distribution & Customer Relationships, Rose Leonard.

Broadly based employee well-being programmes are rapidly becoming the norm in Irish organisations of all sizes. “It is fantastic to see so many employers in Ireland offering well-being and caring programmes to their employees,” says Rose Leonard.

“The increased focus on mental health – an area so many people find difficult to talk about – is especially welcome. Many employers have now put in place a range of supports to assist their employees in this area. These include employee assistance programmes which often include free access to mental health seminars, counselling services and other supports. Zurich’s Tackle Your Feelings programme is one such initiative.”

Tackle your Feelings is Zurich Ireland’s community investment initiative, a three-year national campaign run in partnership with Rugby Players Ireland (formerly IRUPA). It aims to reduce the stigma around mental health and provide people with the tools and resources to be more proactive in looking after their emotional well-being. With some of Ireland’s sporting heroes leading the way, Zurich hopes to inspire Irish people to be more proactive in looking after their mental well-being, so that issues are tackled before they hit crisis stage.

A key component of the initiative is a smartphone app, available on both Android and iPhone, which is replete with personal resources to help people move their mental health status from surviving to thriving. These resources include guides and training aids in areas such as self-confidence, relaxation and mindfulness.

“Mental wellness is a fundamental pillar of any well-being programme,” Leonard adds. “A comprehensive programme should include physical health, and community and financial well-being pillars. We all know the importance of physical health. Making time to bring in some level of physical activity into our daily lives is imperative and many employers have comprehensive workplace programmes to address this.”

Family is core to the community pillar, she points out. “Building out from family are our local communities and the various elements that might include such as neighbours, schools, church community, GAA, rugby, local charities, or whatever you want to get involved in. At Zurich, we are involved in a number of efforts locally including work at the Blackrock Hospice and helping with reading and writing skills at local primary schools as part of the Business in the Community project.”

Financial well-being is the one that we don’t hear as much about, however. And this is despite the fact that employers do invest heavily in the financial well-being of their employees, not least through pension schemes.

The importance of this pillar should not be understated and, in fact, should be at the heart of all well-being programmes, according to Leonard. “Numerous studies conducted right around the world and indeed locally by the ESRI and others provide overwhelming evidence indicating that there is a strong link between financial security and longevity and our overall well-being,” she says.

“The affluence of the area in which you were born, the social class to which you belong and your educational attainment all positively impact on your life expectancy,” she continues. “A deeper dive into socio-economic factors tells us that people living in owner-occupied dwellings live longer than people in private rented accommodation and people who live in private rented accommodation in turn live longer that those living in rented accommodation provided by local authorities or voluntary bodies. People who live in accommodation with central heating on average live longer than those who don’t have access to central heating. Money matters and financial security is a key contributor to our overall well-being.”

While financial security in the short- to medium-term can be provided by a good salary and benefits package, in the longer term the best way to achieve it is through a pension. “At a high level, the goal of the life and pensions industry is to get more people saving for their own futures; to help them have a more financially secure future and to help people realise that their futures can only be financially secure if they accept responsibility themselves for savings. The most efficient way for employees to save for the long-term is through employer pension schemes. That makes what we do in Zurich, and indeed in our industry, relevant to practically every family and every business in Ireland.”

It is interesting to reflect on the reasons why employers set up pension schemes, she notes. “Up to the late 1980s, private sector pension schemes tended to be established on a defined benefit basis – they promised a specific level of benefit to their members generally based on salary and the length of years of service with the employer.

Employers at that time took a paternalistic view of employees who most often spent their entire career with a single employer. Employers felt a social responsibility to look after employees and their families.” But circumstances have changed greatly since then. We are no longer interested in a job for life; employees want more variety; they are happier to take risks, to move around more between employers, to take time out to travel, mind children or try out new challenges.

“Social responsibility is still a huge factor for employers today though,” Leonard adds. “And that becomes apparent when we look at their well-being programmes. Oddly enough, however, pension schemes are not used by employers to any great extent to attract and retain staff. That is probably because employers understand that when employees are faced with a choice between extra money today or setting aside funds to address a need in thirty or forty years’ time, the short-term gain nearly always trumps the future reward.”

That highlights the sense of social responsibility which underpins workplace pension schemes. “Most employers who establish defined contribution schemes today act out of their sense of responsibility to their employees and their families,” says Leonard. “They understand the link between financial security and well-being and they want their employees to have long and healthy lives.

“It is time for employers to highlight that aspect of their well-being programmes,” she concludes. “The link between the pension scheme and the overall health and well-being of employees needs to be spelled out in the clearest possible terms. In short, the pension scheme should be seen as a fundamental and integral part of the employer’s well-being programme.”