Voluntary Pensions and Employee Motivation
Voluntary private pensions serve as a supplement to income and will provide significant support for each of us after retirement.
The voluntary pension system was established in Romania in 2007 and represents a tool for complementing other saving methods for retirement. Unlike “mandatory private pensions” (Pillar 2), the legislation for Pillar 3 does not restrict participation in voluntary pensions based on age; anyone can contribute up to 15% of their gross monthly income to the system, in addition to their contributions to the public pension system. Voluntary pensions (Pillar 3) are managed by private companies (authorized by ASF), based on individual accounts and optional participation. Source: CSSPP.
If you are an employer, you can motivate your employees: Voluntary pensions represent a way to retain employees if the company contributes to a voluntary pension fund. It is considered a beneficial non-salary benefit from a fiscal perspective, as the employer’s contribution is exempt from all salary taxes (mandatory social contributions due from both employee and employer, as well as income tax due from the employee) up to a maximum of 400 EUR per fiscal year.
It has often been observed across various fields that if the work environment factors valued by employees are not respected or suffer degradation, companies experience staff turnover, with associated losses, even if the “financial structure” was at the level desired by the employee. The cost of an employee leaving the company can range between 40-50% of the annual gross salary for workers and 150-300% for top management, varying by industry and/or hierarchical level, with the following main components:
- Visible Costs: Recruitment/selection/training/induction.
- Reduced Productivity: From the decline in productivity of the old employee before departure to achieving the productivity level of the new employee.
- Loss of Clients/Business Partners: In the case of sales or management positions.
- Loss of Business Information: The old employee often holds critical details about the business’s functionality and may use this information for personal benefit or that of third parties.
Therefore, this voluntary pension tool can be used by companies both as a motivational factor and as a risk management tool related to personnel and its turnover. All of this is under very favorable fiscal conditions for companies. Implementing such a program in your company would create the foundation for developing a personnel policy based on a proactive approach to employee health and increasing staff retention in a job market that may or may not offer such salary benefits.
For employees, private pensions provide security, comfort, and peace of mind at retirement, through the accumulation and growth of contributions gathered throughout their lives, in their personal account within the voluntary pension fund.
Since 2009, we have developed a solid partnership with a company specializing in professional risk management and insurance brokerage services, which can offer additional information on this topic.
Those interested in the subject can contact me at contact@florinmpop.ro.