Security Bank’s Trust and Asset Management Group sees employee retirement programs growing in 2021 and becoming part of the new normal for most companies as they recover from the economic effects of the COVID-19 pandemic.
In a recently held webinar for clients, the investment group invited RB Zalamea, Chief Operating Officer of E.M.Zalamea Actuarial Services, Inc. and one of the group’s consultants, to talk about the importance of having a retirement plan for both employers and employees.
During the webinar, Zalamea shared that more companies have started offering employee retirement plans specifically the Defined Contribution type which follows the retirement plans of other economies such as the United States and Europe.
“In the last five years, 40 percent of companies that have started their retirement plans set up a Defined Contribution (DC) type of fund as it engages employees more and encourages employee retention. 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,” says Zalamea.
The new trend of companies availing of DC plans stems from the changing retirement mindset of millennials who prefer fixed monthly contributions with higher returns versus the defined benefit plan that most companies offer employees.
“Despite the move of newer companies to offer DCprograms to employees, the appointment of a Trustee is still very important as they will be the ones to help guide and grow the funds of would-be retirees,” adds Zalamea.
Security Bank’s Trust and Asset Management Group has been managing the investments of Filipinos since 1951.