Setting up workplace pensions and insurance for employees

Dear Sven, I have been running a successful diving school in Vietnam for many years now and have a loyal team of employees, most of whom are Vietnamese. I am worried that when they want to retire or are unable to work due to illness or injury, they will not have sufficient savings/insurance in place to provide for themselves and their families. Is there any way I can set up a universal pension plan for them in Vietnam which I could contribute to on their behalf, or an option that would allow me to deduct a certain amount off their salaries every month to finance such a scheme?

Your concerns are most certainly valid. It would be risky to rely solely on the government to finance citizens who are not able to work in any country, especially in Vietnam, because of low coverage rates in both the formal and informal sectors and the weak capacity for management and implementation of social security programs. Adding fuel to the fire is Vietnam’s rapid population growth and the fact that 25 percent of the population is aged between 10 and 24. Eventually these people will become old and it will become extraordinarily difficult for the government to fund all social security needs. The onus will begin to fall upon companies and employees themselves to make sure they secure their financial futures (much like the West).

Providing added benefits to employees leverages a company’s recruitment program. Job seekers will always be attracted to companies who provide them with adequate benefits and security. Loyal employees will stay longer and remain loyal if they know that the company is at least making an effort to take care of them and their families’ future.

Fortunately there are several options provided by most of the major insurance companies in Vietnam, where your company is able to contribute 100 percent to a pension plan on behalf of all your employees, or where you and your employees could contribute on a dollar- for-dollar basis. Contribution to pension/ savings usually has added tax benefits for companies and employees.

Manulife offers a collective pension/ coverage plan called My Freedom. With this plan your company will be the plan holder and the employees the beneficiaries. The plan covers employees for both life insurance and takes the form of a savings account as well, where female employees are allowed to begin claiming benefits from between the ages of 55 and 70 and males between the 60 and 70 years of age. The life insurance benefit in case of death will be a guaranteed amount, while the amount of money from savings that employees will be able to claim when they come of age will depend on the total amount contributed throughout the period. Companies are able to target how much they would like to contribute to the plan per year, according to their budget. Unfortunately the plan is heavily front- loaded with charges, which decrease significantly throughout the years. Therefore the longer the term of your contribution, the less charges will be levied as a percentage of contributions in later years. A great benefit of the plan is that the returns will not fall below a minimum guaranteed level.

Additionally, Prudential provides a great option for employees that are perhaps for more sophisticated investors who would like to start a savings plan in their own name, and gain the opportunity to obtain higher returns from risky access to Vietnamese stock and bond markets. The Pru-wealth Assured plan covers against critical illness and provides a diversified investment portfolio via mutual funds run by Prudential’s investment management arm, Eastspring Investments. The fund returns have been historically very good; however charges are highly front-loaded as well so it would make sense to contribute to this option for the long term.

Beginning the process of starting your employee benefit scheme is as easy as giving the relevant company a call and asking whether a consultant would be able to come to your office and discuss the details. The consultants speak English well and would be more than willing to do presentations for your employees. You can also discuss your contribution model, whether it will come 100 percent from the company, or shared between the company and employees.

BIO: Sven Roering is a partner and financial planner at Total Wealth Management PTE. Ltd (www.t-wm.com). He holds an Economics Degree from Rhodes University in South Africa, and is a candidate in the Chartered Financial Analyst (CFA) program, having successfully completed level 1 and is currently working towards the level 2 exam.

Share this story, choose your platform!

About the author:

Leave a Comment

188Bet: The ultimate Online Betting App

188Bet: The Ultimate Online Betting App  Online betting in Vietnam has become a popular pastime among sports fans looking to place bets on their favorite sports. By using convenience, accessible, and reliable betting apps and mobile sites, there are no security concerns that the platform will leave you in the dark over licensing, fairness, and

Read More »

Guide and Tips to Help You Earn Your NY Realtors License

The property market in NY is a hotbed of opportunities for aspiring realtors. Besides the dynamic market, the demand for new homes is also high. Most people still harbor the dream of moving to and living in the Empire State. But before you can start working as a realtor in NYC, there are a few

Read More »

The Economics of Online Casinos: How They Make Money

The online casino business has quickly dilated in the last twenty years and what was once considered a small-scale business is now a multi-billion-dollar business. Given the fact that there are thousands of online casinos fighting for a player’s attention, it is really important to know how these websites make money. This article looks at

Read More »

12 Tips To Help You Excel As An HR Manager

Being an HR manager is more than just handling payroll and resolving office disputes. It involves shaping corporate culture, driving employee engagement, and ensuring compliance with legal standards. Excelling in this role requires a blend of strategic vision, operational expertise, and interpersonal skills. This article offers practical tips for HR managers eager to enhance their

Read More »

FAQs for the “Chat with Document” feature of PopAi

What is “Chat with Document” on PopAi? “Chat with Document” is a feature that allows users to upload PDF or DOC files and interact with their content using AI. The AI can help summarize, create outlines, generate notes, and more. What types of files can I upload? You can upload PDF and DOC files. Up

Read More »

The Impact of Predictive Analytics on Gaming Strategy

In the ever-evolving landscape of gaming, the integration of predictive analytics has emerged as a transformative force, reshaping how players approach strategy, decision-making, and gameplay optimization. Predictive analytics leverages data-driven insights and algorithms to anticipate future events, forecast outcomes, and inform strategic choices within gaming environments. In this article, we delve into the profound impact

Read More »