Teaching employees how to retire successfully


Dave Crawford | Proprietor | Planning Retirementmail me |

Employers spend a lot of money providing retirement and other benefits to employees, and yes, it is a cost of doing business. Medical schemes are well known and well appreciated, yet retirement funds are valued less by employees due to a lack of understanding.

This issue of retirement funds not being well understood is borne out by a statistic that appears in the latest Alexander Forbes ‘Member Watch’. Their survey revealed that only 6 percent of retirement fund members will be able to retire with financial independence – that’s an alarming statistic.

For some reason, almost no attention is or has been paid to training (or educating) employees in how to take charge of their own retirement provision. It is a life skill and can and should be taught. This does not happen and the onus is on pension funds and financial advisors to ensure that there will be good outcomes. The mechanics of the process are not difficult, but they need to be taught. Depending on osmosis and salespeople to get the message across is chancy and has so far not been successful across the board.

In 1977 I attended a sales course at one of the major life offices. On this course I was told that a mere 5 percent of retirement fund members would retire in financial comfort. That’s almost forty-three years ago with a one percentage point improvement in circumstances for retiring pension and provident fund members. Something is amiss here.


An interview with Dave Crawford, Proprietor, Planning Retirement, and Dr Ivor Blumenthal, CEO, ArkKonsult, discussing how important it is for employers to provide education and training to inform employees about the issues that will face them when they retire.

Employees attending courses on retirement preparation ask some of the following questions:

  • Am I saving enough?
  • How long will my pension last?
  • What kind of living standard will I have when I retire?
  • How is pension capital translated into income?
  • How do I know what I don’t know?

People in their 50s should just not be asking these questions. They shouldn’t need to! By that age they should know a great deal more about that aspect of their lives and their reasonable expectations of how they will live in retirement. This education should start at much younger ages.

It’s almost as though the personal financial services industry doesn’t trust individuals to get it right. Would you trust an operator of a machine that is valued at several million Rand to do a good job without training? The idea is ironic when you see how the industry itself has failed to improve the situation by more than a token amount over the intervening forty-three years by not training employees.

Where education programs of this nature are instituted for employees by employers as at 3M in Canada there is a noticeable improvement in worker morale and productivity as well as retirement outcomes. One of the takeaways from the 3M program was that it was seen by employees as a generous programme for their own self-improvement.

Pension fund administrators and life assurance companies offer this training ‘free’ but conflicts of interests in this situation make a very solid argument for introducing this education into formal education and training programmes.



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