As low as 15 per cent of employees in the private sector have started investments for retirement so that they can maintain the level of living standard post the work period, says a study by Metlife International.
“Though retirement looms as a source of financial worry, few Indian employees are taking steps to prepare for it. Only one in four Indians has taken any steps to prepare for retirement and even fewer ¿ one in six have begun planning for it,” said the 2011 International Employee Benefits Trends.
In three emerging markets including India, there is also a high level of financial anxiety, it said, adding that this concern is coupled with an even greater lack of preparedness for both retirement and shorter term financial eventualities in countries whose combined total population is 1.5 billion.
In India, a full 85 per cent of those surveyed had not taken any steps to plan for retirement, the study said.
Analysing low level of planning among Indian employees, the report said, cultural factors could be at work here. Fully half of all Indian employees say they do not plan to retire.
This could reflect the relatively young age of the working population, an ambitious, entrepreneurial and interested group highly motivated to improve their standard of living, the study said.
It could also be related to the tradition of older family members being taken care of by their children in India. While it is not their number one concern, a full 55 per cent of employees in India say they are extremely concerned about having enough money to provide for elderly parents or in-laws.
The study, released recently, is based on the survey done across seven major cities in India and 1,090 employees were part of it.
It highlighted that although the wages have appreciated but employers still continue to provide limited benefit to employees.
“While foreign multinationals have caused wages to rise in certain sectors and are influencing the types of benefits offered, Indian employers nevertheless continue to provide only a limited benefit offering to their employees,” it said.
With the exception of health and critical illness insurance, less than half of all employers offer any other products. The labour surplus and cultural factors, plus the cost of benefits, continue to play a role here and influence employer attitudes as they did in the first survey four years ago, the study said.