The survey, applied to more than 2,600 employees, interestingly showed the high percentage, 77%, that considers saving for a better pension as relevant and 67% believe they will have to continue working after reaching the legal retirement age, evidencing the existence of a greater awareness on the importance of saving longer for the pension.
Additionally, the results of this third edition showed up that 25% of the participating organizations have economic benefits intended to contribute to the pension savings of their employees while 81% holds talks to inform them about the subject. "The employer is closer to workers during their working life and, therefore, can take an active role in showing, encouraging and even supporting them on their journey to save for old age. That is why we believe it is important to distinguish this type of efforts and encourage them through this recognition as well as to share the good practices that emerge", explained Romeo Hodali, general manager of AFP Capital.
Another noteworthy fact coming from the survey is that pensions would improve by 23% if the contribution on taxable income increased by 5 percentage points and by 27% if retirement age were postponed by 3 years. Additionally, it was found that average replacement rate reaches 40% and 55% for women and men respectively.
This Recognition is an indicator that annually acknowledges the pension management carried out by companies for their workers, whose evaluation generates a learning process for the organizations in their role regarding their current obligations and future conditions that they may implement. In these three years, participating companies have begun to manage the pension matter; implementing programs that sometimes not only provide information but also concretely contribute to savings for their employees' pensions.
"Chile is facing a key moment in Social Security matters. Consequently, we promote urgent changes, through PROhumana, both at employer and employee levels. This implies a work of awareness by both parties, together with an active role by the companies through concrete actions that contribute to the improvement of the pension system of its workers, seeking to go beyond legislation and ensuring their long term welfare through programs of awareness, education and support for young people, women and senior citizens", explained Soledad Teixidó, Executive President of PROhumana.
The participants to the Recognition undergo an evaluation process by PROhumana and receive a complete analysis of the future pensions of their collaborators, divided by age and gender and a report with the best practices detected.
Main results from Recognition for Sustainable Pension Management 2018
(Based on the total sample of more than 2,600 workers from the participating companies)
• 96% of workers considers savings as important
• 77% considers saving for better pension as important
• 67% believes that they should continue working after reaching the legal retirement age
• 63% says they know and understand how the pension system works
• 62% understands what the APV (Voluntary Pension Savings) and its benefits are
• 49% has some type of voluntary pension savings
• 49% knows the fee charged by their AFP
• 46% has had pension loopholes
• 42% know their estimated pension based on the projection of current conditions
• 23% would increase the pension if the contribution percentage increased by 5%
• 27% would increase the pension if retirement is postponed by 3 years.
Table: Results from Recognition of Sustainable Pension Management 2018
Participating companies 16
Workers surveyed 2.600
Companies by category Excellence place: L’Oréal
Level II “Education and Awareness”: Bagó, Falabella and Flesan
Level III “Support and Welfare to workers”: Enaex
Track record: L’Oréal, Falabella and Bagó
Ongoing improvement: Enaex
About AFP Capital
AFP Capital is a company of SURA Asset Management Chile whose operations in Chile are pension, insurance, mutual funds and stocks. AFP Capital’s AUM amounts to US$ 40 billion owned by 1.7 million customers, and it is present in 30 cities along the country, being the only AFP present in Easter Island.
About SURA Asset Management
SURA Asset Management is a subsidiary of SURA Group, expert in Pensions, Asset Management, Savings and Investments and present in Chile, México, Colombia, Perú, El Salvador y Uruguay. As of December 2017, SURA Asset Management’s AUM amounts to USD$134.9 billion owned by 18.8 million customers.
* Customers and AUM include AFP Protection in Colombia and AFP Crecer in El Salvador, although not controlled companies, SURA AM has a significant stake.