Description
As they plan for expansion either in major global or home markets, multinational companies and local domestic firms would be well-advised to review their employee benefits strategies to ensure that they are aligned with and support the company's business objectives.
2011
International
Employee
Bene?ts Trends
Diverse in form but unique in function, bridges
evoke our ability to create solutions to complex
challenges, to establish enduring connections and
to drive progress toward a better future. Global
employee bene?ts act in a similar supporting
fashion, enabling companies to achieve business
objectives and their workers to meet the needs
of the present while building a secure ?nancial
future for themselves and their families.
MetLife has a proud tradition of investing
in the financial and social well-being of the
communities in which we do business. For
more than 140 years, we have focused on
understanding and serving our customers
through various life stages and economic cycles
through groundbreaking and reliable research.
Moreover, with the acquisition of Alico in
2010, MetLife now has an even larger global
footprint upon which to expand this tradition
of excellence in benefits trends research. We
will continue to serve as a leading voice on
employee benefits by actively influencing public
policy, educating the media and developing
intelligent and useful products.
2011 STUDY: INTRO 1
Introduction
Globalization, along with the ?nancial crisis
of 2008-2009, has put a sharp spotlight on
the changing role and complexity of employee
bene?ts as a tool for companies of all sizes
and industries. Workplace-provided bene?ts —
including retirement, health coverage, disability or
life insurance — often have an important positive
socio-economic impact, especially as governments
begin to seek savings and cut programs in the
face of demographic and budgetary challenges.
report delves into their perceptions on bene?ts
objectives and current practices. Where possible
and relevant, we have compared and contrasted
with the results of the ?rst study. The report
offers actionable conclusions for employers, both
domestic and multinational, which can serve
as guidelines for future bene?ts strategies and
plans. As the global economy returns to a path
of steady growth, the ?ndings of the 2011 report
complement the ?rst study and also aid any
employer with multinational operations planning
to expand internationally.
For more than 140 years, MetLife has been a
leading provider of innovative bene?ts solutions
to companies and their employees. Our ?rst
employee bene?ts trends study was launched in
the U.S. in 2001 and is now in its ninth annual
edition. Moreover, with the acquisition of Alico
in 2010, MetLife now has an even larger global
footprint, with operations and of?ces in more
than 60 countries on six continents. With this
expanded global footprint comes a greater set
of capabilities and a keen understanding of the
world of employee bene?ts, such as the future
of health and wellness programs and retirement
and pension plans for global and local employers.
This second international study is one of many
tools that MetLife provides to employers, brokers,
consultants and other bene?ts professionals.
We invite you to contact your MetLife
representative for a more in-depth discussion
about bene?ts strategies. In the meantime, we
hope you will ?nd the information and analysis
in this second edition of the MetLife International
Employee Bene?ts Trends Study to be of value in
assessing and improving the effectiveness of your
company’s or client’s employee bene?ts plans.
At the same time, the current economic climate is
pressuring the private sector globally to scrutinize
the cost and scope of the bene?ts provided to
workers. There can also be considerable regional
differences in what companies can expect to offer
without jeopardizing their business objectives.
Given the rapidly changing global economy and
role of employee bene?ts, MetLife decided to
expand on its ?rst International Employee Bene?ts
Trends Study, published in 2007.
Our 2011 International Employee Bene?ts Trends
Study includes the four countries from the ?rst
edition — Australia, India, Mexico and the United
Kingdom — plus the addition of a major emerging
market, Brazil. The 2011 report contains the
results of our surveys of employers and employees
from these ?ve countries, which provide a
representative sample of different economic and
workplace environments.
Australia and the United Kingdom are two
mature, industrialized countries that have many
of the demographic trends and challenges of
economically advanced nations. Brazil and India
are two of the high-growth emerging markets,
known along with Russia and China, as BRICs,
which are expected to dominate the world
economy by mid-century. They have similar
economic and demographic characteristics and
challenges, though India’s large population puts
it in a class by itself in many respects. Mexico is
close to both India and Brazil on many issues,
though it has a smaller population and economy
than either of them.
As in the ?rst study, the data in this report
provide insight into the ?nancial concerns,
needs, habits and expectations of employees in
each of these ?ve countries. For employers, the
Contents
Global Overview 4
Australia 16
Brazil 26
India 36
Mexico 46
United Kingdom 56
Methodology 67
2011 STUDY: INTRO 3
Global
Overview
2011 STUDY: OVERVIEW 5
Adapting and Aligning
Employee Bene?ts
to New Global
Economic Realities
GLOBAL OVERVIEW
DESPITE ONGOING UNCERTAINTIES STEMMING FROM
EVENTS IN THE MIDDLE EAST AND JAPAN, THE GLOBAL
ECONOMY IS EXPECTED TO CONTINUE TO CHART A
GROWTH COURSE IN 2011 AND BEYOND.
1
1
Fitch Ratings, Special Report: Global Economic Outlook, 3-31-11
2
Source World Bank and CIA World Fact Book and The IMF
3
http://www.express.co.uk/posts/view/235250/How-Britain-is-stuck-near-the-bottom-of-world-pension-league
GDP POPULATION LIFE EXPECTANCY
AT BIRTH (YEARS)
MEDIAN
AGE (YEARS)
INDIA $1.4 trillion 1.15 billion 66.8 25.0
BRAZIL $2.0 trillion 203 million 73.7 29.0
MEXICO $1.0 trillion 112 million 76.4 27.1
UNITED KINGDOM $2.2 trillion 62.6 million 80.0 40.0
AUSTRALIA $1.2 trillion 21.7 million 81.8 37.7
UNITED STATES $14.1 trillion 307 million 78.0 36.6
DIVERSE ECONOMIES AND DEMOGRAPHICS — DESCENDING ORDER OF POPULATION SIZE
2
As they plan for expansion either in major
global or home markets, multinational
companies and local domestic ?rms would
be well-advised to review their employee
bene?ts strategies to ensure that they are
aligned with and support the company’s
business objectives.
While globalization has had a homogenizing
or ?attening effect in certain areas, such as
the free ?ow of capital or information transfer
with the click of a computer mouse, employee
bene?ts practices can still diverge widely from
country to country. Health care, pensions, life
insurance, and disability are bene?ts that are
often regulated by governments or provided
under state social programs. Government
mandate — or the lack of it — will often
determine both the expectations of employees
and what companies offer.
Retirement bene?ts provide an apt example.
In the two developed economies in this
survey, Australia and the United Kingdom,
the pension plans are quite different. Australia
has its superannuation fund, which is a
government-directed compulsory retirement
savings plan with contributions from
employers and employees. Consequently,
private employers in Australia do not usually
provide a separate de?ned bene?t pension.
In contrast, private companies in the U.K.
have long provided de?ned bene?t pensions
to their employees, with the government
pension amounting to a relatively small sum
compared to other developed countries.
3
The great ?nancial crisis of 2008-
2009 has left a generally high level
of ?nancial concern in its wake
in these countries.
2011 STUDY: OVERVIEW 7
But even government mandates can change,
especially in the light of stark ?scal and
demographic reality.
4
One of the key ?ndings
of our 2011 International Employee Bene?ts
Trends Study is that the great ?nancial
crisis of 2008-2009 has left a generally
high level of ?nancial concern in its wake
in these countries, often accompanied by
a lack of preparation about how to meet
these challenges and return to long-term
?scal health. Staying with the example of
retirement: in the case of Australia and the
U.K., both governments are implementing
changes this year and next year to their
pensions systems, changes that will have a
direct impact on both companies and their
employees. In these countries, the retirement
bene?ts landscape is in ?ux due to budgetary
pressures and populations with some of the
highest life expectancy on the planet.
In our three emerging markets, India, Brazil
and Mexico, there is also a high level of
?nancial anxiety. This concern is coupled,
however, with an even greater lack of
preparedness for both retirement and shorter-
term ?nancial eventualities in countries
whose combined total population is 1.5
billion. Consumer con?dence shows signs of
improvement, however, particularly in
Latin America.
5
Our research results presented in the ?ve
country chapters can help companies devise
solutions to meet these bene?ts challenges
in diverse economies with varying levels of
development. As from the previous study,
multinational companies can extract vital
country-speci?c information and cultural
nuances that can provide the foundation
for local bene?ts strategies. Local domestic
companies will ?nd data which they can use
as benchmarks and input for the formulation
of future bene?ts strategies.
Global Economy,
Local Bene?ts
In its international employee bene?ts research,
MetLife seeks to identify global and regional
trends and benchmark best practices that
enable companies to make informed decisions
that support their goals and strategy.
Employee bene?ts is a strategic investment
in business success regardless of country,
currency or culture. By their very nature, the
principles and ideas in managing bene?ts
entail both “thinking globally and acting
locally.” As in our ?rst study, we identi?ed a
number of challenges confronting companies
that are keen to roll out the right set of
bene?ts for employees in a given market:
• Understanding the impact of the changing
global economy on both employers and
their workers and how this has affected
expectations from our ?rst study.
• Educating employers and HR managers on
the connections between providing bene?ts
and achieving objectives.
• Educating employees on how their bene?ts
serve an important function in their
?nancial safety net, thereby maximizing
the value of the bene?ts offering for all
stakeholders and helping the employer
achieve business objectives.
• Adapting bene?t plans to changing
government mandates, regulatory
requirements and local cultural
circumstances.
• Recognizing regional economic differences,
particularly in larger countries, and
knowing how these are re?ected in
the types of bene?ts offered within the
countries. Our study looked at regional
differences in India and Mexico.
4
http://www.economist.com/node/18502013
5
A Global Nielsen Consumer Report, January 2011, www.nielsen.com
• Aligning global bene?ts packages and
practices — especially those of multinational
companies — to local conditions while
ensuring ?exibility and consistency within
the corporate framework.
Adjusting to and
Acting on New
Economic Realities
The great ?nancial crisis of 2008-2009 acted
like an economic tsunami, lowering the
con?dence of consumers and dashing some
of the employees’ expectations for a wider
array of workplace bene?ts we catalogued in
our 2007 study. While the gradual return to
economic growth worldwide has improved
con?dence levels somewhat, we found that
there are still high levels of ?nancial concern in
these markets. More importantly, this concern
is accompanied by a general inaction on the
part of employers and employees to ?ll the
gaps with either company-paid or voluntary
bene?ts or products bought on the open
market from third parties.
Across the board in all ?ve countries, having
enough money either to cover a sudden loss
in income or just to make ends meet ranks in
the top three of employee ?nancial concerns.
Underscoring the potential fragility of the
recovery, employees in the U.K., Australia and
2011 STUDY: OVERVIEW 9
Mexico cite job security as either their ?rst or
second concern regarding ?nancial security.
Employees in the major emerging markets of
India and Brazil, two of the fastest growing
economies worldwide, are more con?dent
about their job security.
Even in the U.K., which has the highest level
of ownership of ?nancial products among
the surveyed countries, two-thirds of the
employees surveyed had not taken any
steps to determine their disability insurance
needs. Yet, anxiety about sudden income
loss is on the rise there. The trends are similar
in the other mature market, Australia, where
employees generally own few ?nancial
products outside of those purchased in
the workplace.
In Brazil and Mexico, which have large
populations of young people, employees cite
having enough money for education as a top
three concern.
The Potential of
Voluntary Bene?ts
Employers in all ?ve countries are looking for
ways to lower the costs of the bene?ts they
provide and have their employees share some
of the burden. Employers who do not offer
bene?ts cite cost as the main reason, though
not always. In India, 30% of employers who
#1 #2 #3
AUSTRALIA Income protection Travel accident Total permanent disability
BRAZIL Term life insurance Health insurance Dental insurance
INDIA Health insurance Critical illness insurance Pension
MEXICO Life insurance Savings fund Health insurance
UNITED KINGDOM Pension Private medical Life insurance
TOP BENEFITS CURRENTLY OFFERED
do not offer bene?ts said it was a matter of
planning, suggesting a basic lack of awareness
of the connection between offering products
and achieving their top goal of increasing
employee productivity.
As in the United States, there is a growing
interest among employees in employee-paid
voluntary bene?ts offered at work.
Using the U.S. as a benchmark, nearly two-
thirds (61%) of American employees say they
value voluntary bene?ts as a way to meet their
personal needs; and 52% said they are ready
to choose a wider array of voluntary bene?ts
that they pay for themselves. But there is a
disconnect in the U.S. between employees and
their companies on this topic: more than one
in four companies (43%) said they believed
their employees were not interested in a wider
range of voluntary bene?ts and only 14% said
they were likely to increase the amount of
these bene?ts to choose from.
6
In some of the countries in our international
survey, we found similar but not always
identical trends concerning voluntary bene?ts:
• In Brazil, for example, nearly one-third of
women not currently receiving bene?ts
said that they were interested in purchasing
products such as personal accident and
private pension through their employers but
paying 100% of the costs themselves. This
is signi?cant because women are a growing
component of the Brazilian workforce
with their per capita income growing
7.3% from 2000 to 2006 (compared to
Across the board in all ?ve
countries, having enough money
either to cover a sudden loss in
income or just to make ends meet
ranks in the top three of employee
?nancial concerns.
2011 STUDY: OVERVIEW 11
of Mexican employers said they saw value
and advantages in offering workers a
broader choice of voluntary bene?ts.
In general, our study found that offering
bene?ts on a voluntary basis is a cost-effective
way for employers to help employees obtain
the right amount of ?nancial protection for
their needs.
Retirement:
Aging Populations,
Underfunded Accounts
Economic development and industrialization
contribute not only to rising standards of living,
but also to greater longevity. Worldwide,
people are living longer. In the ?ve very diverse
countries surveyed, life expectancy ranges
from about 67 years in India to about 82 years
in Australia. The trend is moving in an upward
direction, toward longer lives and extended
retirement. In the United States, people who
reach age 65 today can expect to live almost
another 20 years.
7
In Japan, a woman born
today has about a 50% chance of becoming
a centenarian.
8
2.6% for men). Nearly half of all Brazilian
employees who currently receive workplace
bene?ts said they are interested in a wider
array of voluntary bene?ts. A majority of
Brazilian employers said they saw value and
advantages in offering workers a broader
choice of voluntary bene?ts.
• In Australia, the majority of employers
are not convinced that offering voluntary
bene?ts should be part of their strategy,
but one in ?ve employees said they would
be interested in purchasing products such
as income protection. Financial planning
services could be one of these voluntary
bene?ts as only 36% of Australian male
employees and 24% of female employees
said they were con?dent in making ?nancial
decisions. Given the looming labor shortage
Down Under, Australian employers might
want to consider this option.
• In Mexico, 56% of workers who currently
have workplace bene?ts said they wanted
a wider choice of voluntary bene?ts.
About one in four Mexican employees
who currently do not receive bene?ts said
they would pay the full cost to get life,
disability and health insurance as well as a
savings fund via the workplace. A majority
6
9th Annual Employee Bene?ts Trends Study, MetLife, 2011, pps. 26-27
7
http://www.economist.com/node/18502013
8
World Bank and CIA World Fact Book
TOP THREE FINANCIAL CONCERNS AND WORK/LIFE GOALS OF EMPLOYEES
#1 #2 #3
AUSTRALIA Enough money to pay bills
during sudden income loss
Job security Enough money
to make ends meet
BRAZIL Enough money for
children’s education
Enough money to pay bills
during sudden income loss
More time to spend
with family
INDIA Enough money
to make ends meet
Appropriate health
insurance
Resources and time to care
for aging parents and relatives
MEXICO Enough money to pay bills
during sudden income loss
Job security Enough money for
children’s education
UNITED KINGDOM Job security Enough money
to make ends meet
Enough money to pay bills
during sudden income loss
Workers in the ?ve countries surveyed are
certainly aware that they are living longer.
Most workers are also planning to retire in
their early 60s, or even earlier in the case
of Mexico. The result is that people are
anticipating longer retirements than ever
before. But this good news creates its own
pressures. In our study, “outliving retirement
money” is viewed as a major concern for all
countries except India. But even in India, the
number one retirement concern is having
enough money to afford health care, while
another top worry is having to work in
retirement to live comfortably.
Yet, this awareness that the retirement nest
egg might not last one’s entire golden years
is for the most part not translating into
increased savings and planning among the
groups surveyed. This is particularly true in
our three emerging markets. In India, a full
85% of those surveyed had not taken any
steps to plan for retirement. About three-
quarters of all Mexican workers had not taken
any steps to plan for retirement or determine
what their income needs will be when they
stop working; about two-thirds of all Brazilian
workers are not prepared for retirement.
In Australia, with its higher per capita income
and mandatory pension system, about three-
quarters of all workers say they are behind in
reaching their ?nancial goals for retirement.
And only one in four has done any planning
beyond that needed for their superannuation
fund. Even in the U.K., about one-third of older
workers approaching retirement are worried
about how to replenish savings that were
depleted by the recent stock market crash.
Governments as well as private employers
worldwide are assessing their retirement
systems and pension plans in light of these
demographic realities. More people living
longer means the overall public burden of
retirement will skyrocket, and it has begun
to do so, including in the United States.
9
A key ?nding on retirement from our research
is that most employees cannot rely solely
on govern ment pensions and employer-
sponsored plans to have enough money to
#1 #2 #3
AUSTRALIA Outliving
retirement money
Being able to afford
health care in
retirement years
Having to work full-time or
part-time to live comfortably
in retirement years
BRAZIL Being able to afford
health care in
retirement years
Outliving
retirement money
Having enough money
to take care of elderly
parents or in-laws
INDIA Being able to afford
health care in
retirement years
Having to work full-time or
part-time to live comfortably
in retirement years
Providing for your own
long-term care needs
MEXICO Being able to afford
health care in
retirement years
Having to work full-time or
part-time to live comfortably
in retirement years
Outliving
retirement money
UNITED KINGDOM Outliving
retirement money
Providing for your
spouse/partner’s
long-term care needs
Having to work full-time or
part-time to live comfortably
in retirement years
TOP CONCERNS OF EMPLOYEES REGARDING RETIREMENT
9
http://www.economist.com/node/18502013
live on for 20 or more years after they stop
working. Employees will need to contribute
more to their retire ment savings. Employers,
for their part, should also be more open
to offering more ?exible types of bene?ts,
including ?nancial planning services for their
workers. In the end, having the right amount
of information and ?nancial education — and
the tools to act on this information — will
bene?t workers, their companies and society.
Common Challenges
for Both Sides
The 2011 MetLife Study of International
Employee Bene?ts Trends found a number
of common concerns among employers
and workers that apply to all of the countries
in our survey, regardless of size and level
of development. Our report also revealed
some distinct differences, including among
the regions of India and Mexico.
Common challenges confronting both
multinational companies and their in-country
counterparts are:
• Increasing the productivity of their workers:
All ?ve countries have this as one of their
top three bene?ts objectives. It is the
primary concern in India and Mexico,
and ranks second for Brazil. As the global
economy continues to grow this year and
competition for customers rises, companies
will need to re?ne their bene?ts strategies
to get more out of their workers.
• Retaining employees: This is the number
one priority for the two developed
economies in our study. This could present
a challenge in Australia and Brazil, which
face labor shortages. For example, in
Brazil, employees express greater loyalty
to employers who provide bene?ts, while
in Australia there is a disconnect between
companies and workers, with the former
overestimating the loyalty of the latter.
Companies in all ?ve countries should
also review their bene?ts policies to make
sure there is no disconnect between
what they offer and what their workers
seek — we saw this in a number of cases
in our research.
• Controlling health and welfare bene?t
costs: This is a top concern for the three
emerging markets in our study, which
also have the largest working populations.
As living standards rise in Brazil, India and
Mexico, workers will look to employers
to offer more bene?ts. The continued
acceleration of health care costs worldwide
presents a challenge that will require
creative, long-term solutions involving both
the public and private sectors.
• Improving ?nancial planning skills of
employees: Many employees do not take
the time to do ?nancial planning or needs
assessments and are therefore unaware
of the options available to them. Preparing
for challenges such as income loss or
disability requires skills that employees in
all countries could use.
• Confronting the retirement issue head on:
Pensions are costing more and people
are living longer, while government funds
face shortfalls. Retirement is an issue
that should bring employers and workers
together for an honest discussion about
contributions, expectations and solutions.
Retirement and health care are the bene?ts
issues of the 21st Century.
One ?nal point to bear in mind is that
achieving multiple bene?ts objectives involves
a ?ne balancing act for employers. Focusing
on cost control only, for example, may come at
the expense of achieving employee productivity
or employee retention. Employers need to take
a more holistic view of their offerings.
2011 STUDY: OVERVIEW 13
Conclusion and
Next Steps
The above challenges and concerns merely
scratch the surface of the global bene?ts
landscape. What can employers do to move
the ball forward given the results of our study?
Connecting the dots: Employers across
the board need to better understand the
value that bene?ts can offer in helping
them address their top HR concerns in this
changing global economy. This can be true
for employers who already offer bene?ts
as well as those who are considering doing
so for the ?rst time. Starting two-way
dialogue with employees, through the HR
and corporate communication channels,
can jump start this process and lead it
to success.
Education: In bene?t planning, the ?rst step is
education. Many employees in the countries
surveyed are either unaware of the products
and options available to them or lack the
knowledge and con?dence to research their
insurance and savings needs. Employers can
stress the value of workplace bene?ts to
employees, such as cost advantages, safety,
simplicity and convenience of voluntary
bene?ts. Employers can also get more
engaged in ?nancial planning assistance and
discuss the introduction of ?exible bene?ts
that help employees achieve a better
work/life balance.
Expanding to include voluntary bene?ts:
Bene?ts providers could show employers
how voluntary bene?ts will not add to their
costs but still enable them to offer more
bene?ts to employees. Employers seeking to
differentiate themselves and attract the most
skilled workers could broaden their bene?ts
offerings to include more voluntary bene?ts,
such as disability insurance, life insurance
or dental.
Women in the workforce: Our study
showed that women in our survey countries,
including the mature economies, often have
greater ?nancial concerns than men and
are interested in bene?ts such as ?nancial
planning. Many women seek ?nancial
independence as part of their career goals.
Both domestic companies and foreign multi-
nationals would do well to pay attention
to the goals of their women employees.
Bene?ts providers have an opportunity to
educate the female employee population on
?nancial planning to help ensure a secure
?nancial future.
#1 #2 #3
AUSTRALIA Retaining employees Increasing employee
job satisfaction
Increasing employee
productivity
BRAZIL Increasing employee
job satisfaction
Increasing employee
productivity
Controlling health and
welfare benefit costs
INDIA Increasing employee
productivity
Controlling health and
welfare benefit costs
Helping employees make
better financial decisions
MEXICO Increasing employee
productivity
Increasing employee
job satisfaction
Controlling health and
welfare benefit costs
UNITED KINGDOM Retaining employees Increasing employee
job satisfaction
Increasing employee
productivity
TOP BENEFITS OBJECTIVES OF EMPLOYERS
2011 STUDY: SECTION 15
Workers in the ?ve countries
surveyed are certainly aware
that they are living longer.
Most workers are also
planning to retire in their early
60s, or even earlier in the
case of Mexico. The result is
that people are anticipating
longer retirements than ever
before. But this good news
creates its own pressures.
2011 STUDY: OVERVIEW 15
Australia
1
Sources for this section are either The CIA World Fact Book or The World Bank or The IMF. All ?gures are in U.S. dollars.
Market Pro?le
1
• 13th largest global economy
• GDP of $1.2 trillion: Services (71%);
Industry (25%); Agriculture (4%)
• GDP per capita of $41,300
• Developed, industrialized country with
market-based economy
• Australia is the largest and fastest-
growing market in the Asia-Paci?c
region for retirement income products
• Foreign direct investment net in?ows
of $22.5 billion
• Population 21.7 million;
labor force of 11.6 million
• Life expectancy at birth 81.8 years
• Median age 37.7 years
to 12% over the coming years; that increase is still
awaiting approval by the Australian Parliament.
All superannuation funds have an investment
component, and the government is also
making it easier for employees to choose the
superannuation fund in which they want to put
their money.
Any discussion of employee bene?ts in Australia
must consider how non-medical based insurance
coverage is delivered. Most superannuation
funds also have, either on a voluntary or
mandatory basis, an insurance component for
products including term life, disability and income
protection. While American-style, employer-
sponsored corporate or group insurance is
available in the Australian market, most employees
obtain their insurance coverage through the
superannuation relationship. Such coverage
is contracted between the trustees of the
superannuation fund and local insurance providers.
While many employers choose a particular super-
annuation fund in which they fund employees’
superannuation contributions, employees
can choose to have their dollars directed to a
superannuation fund of their choice. It is common
for employees to have dollars invested in multiple
supernannuation funds, although consolidation
is being emphasized.
Employees may purchase additional insurance
bene?ts if offered, and costs are deducted from
their investment account.
There is government-provided national health
insurance but private supplemental health
insurance is available and frequently obtained.
Bene?ts at a Glance
Australia has a government-regulated,
mandatory retirement savings program called
“superannuation,” a system that requires
employers to contribute a percentage of workers’
annual base salary to a fund of the employees’
choice. Recognizing that Australians are not
saving enough for retirement, the government
has proposed to increase the amount from 9%
2011 STUDY: AUSTRALIA 17
EMPLOYEES WHO BELIEVE THEY WILL OUTLIVE THEIR RETIREMENT MONEY
IN THE WAKE OF THE GREAT FINANCIAL CRISIS,
OUR STUDY FOUND AUSTRALIANS EXPRESSING
CONCERN ABOUT HOW TO ADDRESS THEIR
OVERALL FINANCIAL NEEDS — BOTH NOW AND
FOR THE FUTURE.
Financial Concerns Loom
Over Retirement Savings,
Low Product Ownership and
Potential Labor Shortage
AUSTRALIA
51+ year olds
41-50 year olds
31-40 year olds
18-30 year olds
All employees 39%
28%
37%
46%
51%
Percentages have been rounded to the nearest whole number.
The bright side is that the global ?nancial crisis
left the island continent relatively unscathed.
A rapid response from the government in
the form of a $50 billion stimulus package
and the cutting of interest rates to historic
lows helped the economy rebound after
just one quarter of contraction. Strong
demand for natural resources — especially
from China — also put the wind back into
Australia’s economic sails.
2
Global consumer
con?dence surveys ?nd Australians among the
most con?dent in the world when it comes to
believing that their economic lot will improve
in the next 12 months.
3
However, despite this optimism and relative
resilience of the Australian economy, many
Australians said they suffered a variety of
economic troubles, including job distress,
dif?culty in paying bills and debt, or housing
problems. In fact, “Having enough money to
pay the bills during sudden income loss” tops
the list of ?nancial concerns for Australians
today, while four years ago this worry had
second place. Concerns about job security
rose in urgency from the last survey, moving
from third to second place among Australians’
top ?nancial concerns.
Given this dichotomy between optimism
and concern, or perhaps because of it, the
majority of Australians have not taken steps
to address their ?nancial security concerns,
and ownership of ?nancial protection
products beyond simple life insurance and
2011 STUDY: AUSTRALIA 19
2
https://www.cia.gov/library/publications/the-world-factbook/geos/as.html
3
http://in.reuters.com/article/2011/01/23/idINIndia-54344020110123
The majority of Australians have
not taken steps to address their
?nancial security concerns, and
ownership of ?nancial protection
products is quite low.
some income protection coverage is quite
low. Contributing to this low ownership
rate is the fact that few products are owned
through the workplace, primarily because
most superannuation funds and employers
do not offer such bene?ts, including those
to supplement retirement savings.
• Only 41% of those surveyed have taken
steps to determine their household’s level
of income protection needs, even though
almost two-thirds of those surveyed aged
41-50 cited a disabled principal wage
earner as their highest ?nancial worry.
• Fewer than half have researched their
household’s life insurance needs, although
47% of those surveyed with children list
premature death as a top ?nancial concern.
• Australians own an average of only one
?nancial product through the workplace,
and ownership of life insurance, income
protection and total permanent disability
is low. Those over age 30 own more
products (an average of ?ve) obtained
outside the workplace.
“ Having enough money to
pay the bills during sudden
income loss” tops the
list of ?nancial concerns
for Australians today.
Job security moved from
third to second place.
EMPLOYEES WHO HAVE DONE ANY
PLANNING FOR RETIREMENT
61%
39%
No
Yes
Percentages have been rounded to the nearest whole number.
2011 STUDY: AUSTRALIA 21
Retirement Down
Under: Longer Lives
Mean Greater Need for
Income Supplements
Retirement is clearly the Australians’ biggest
long-term ?nancial concern. With average life
expectancy well into the their 80’s, Australians
are justi?ably concerned about outliving their
retirement income.
Australia established its current superannuation
fund system in 1992 to help ?nance
employees’ retirement in light of demographic
trends showing an aging population outliving
its means to support itself. The program has
since had internationally recognized success,
with approximately $1.3 trillion in assets
today — giving the Australian worker more
money invested in managed funds per capita
than workers in any other country.
4
Employers must contribute 9% of employees
earnings base to the fund; there is a
governmental proposal currently under
review which will increase this contribution,
if approved, to 12%. The government is also
now making it easier for employees to choose
the superannuation fund in which they want
to invest their money. But only 12% of all
employers match the employee contribution
to the superannuation fund.
Despite this success and investment,
projections show that more than half of
all Australians will outlive their retirement
savings.
5
Australians are increasingly aware
of this, as our 2011 study shows. A majority
of Australian workers say they plan to retire
at 60, and thus they will need money to
live on well into their 80s. It should come
as no surprise then that their top retirement
concern is “outliving retirement money.”
Yet, only four in 10 are taking any steps to
supplement their projected retirement needs.
About three-fourths of Australians believe they
are not accumulating enough wealth and are
behind in reaching their retirement ?nancial
goals; and the concern about outliving their
funds grows the closer the employee is to
retirement, with 52% of Australians over the
age of 51 years saying they are extremely
concerned about outspending their savings —
this is up from 49% in the previous study.
As Australians decide where to deposit
their superannuation contributions, both
superannuation funds and employers have an
opportunity to provide access to information
that will help them make decisions on their
future savings choices.
4
http://www.mpfexpress.com/Downloads/Articles/2011/03/28/mpfx-voice-
providers-Q07.pdf
5
http://www.vrl-?nancial-news.com/wealth-management/life-insurance-intl/
issues/lii-2011/lii-256/big-?aws-in-australia%E2%80%99s-super.aspx
Don’t have goals
Haven’t started
Significantly behind
Somewhat behind
On track for reaching goals
Already achieved goals 2%
22%
23%
18%
19%
16%
EMPLOYEES’ PERCEPTIONS ABOUT ACHIEVING THEIR RETIREMENT GOALS
Percentages have been rounded to the nearest whole number.
A look at the average superannuation fund
balance shows the root of this concern.
Even among those approaching retirement,
those over 50 years, the average account
total is $52,500.
Employees have the opportunity to
supplement their superannuation fund
through additional contributions. But only
25% of Australian employees contribute more
than the mandatory 9% and only 20% opt
to have a lower salary in exchange for higher
contributions to the superannuation fund
(known as salary sacri?cing). This could re?ect
cash-?ow dif?culties but it could also be an
issue of education and understanding of the
need to save more.
Even though a wide majority of employees
(76%) and a majority of employers
(52%) said they were satis?ed with their
superannuation fund provider, few express
interest in purchasing additional ?nancial
products and services through their fund.
This could stem from a lack of awareness
of what is available. Only about a third of
employers use a broker or consultant for
employee bene?ts. Employers that use a
broker or consultant do so because they need
administration assistance, pricing information
and help in both identifying a short list of
carriers and in recommending new bene?ts.
Financial stability and service, including
being easy to do business with, are the
overwhelmingly top criteria for selecting
a bene?ts carrier in Australia.
Projections show that more
than half of all Australians will
outlive their retirement savings.
Yet, only four in 10 are taking
any steps to supplement their
projected retirement needs.
Helping employees make better financial decisions
Helping employees make better benefits decisions
Reducing HR administrative costs
Addressing diverse needs of employees
Attracting employees
Increasing employee productivity
Increasing employee job satisfaction
Retaining employees
90%
84%
86%
79%
84%
82%
84%
66%
57%
52%
56%
61%
49%
69%
43%
56%
Australia U.S.
MOST IMPORTANT BENEFITS OBJECTIVES OF ALL EMPLOYERS
Percentages have been rounded to the nearest whole number.
2011 STUDY: AUSTRALIA 23
Workplace: Looming
Labor Crunch Puts
Spotlight on Bene?ts
Employers believe that Australia can expect
a labor shortage within the next two years
and that competition for workers could spike.
While 40% expect a shortage of labor, about
two-thirds of employers think that they will
have dif?culty in attracting employees in the
next 18 months. This sentiment increases
with the size of the company, with fully 75%
of those companies with more than 1,000
employees anticipating a hiring shortage.
While economic growth will drive some of
this shortage as employers add jobs, more
than two-thirds of employers surveyed believe
that the aging workforce will also have an
impact on the Australian labor market. For this
reason, 90% of employers listed employee
retention as their top bene?ts objective.
Increasing employee job satisfaction and
boosting employee productivity rank as the
second and third objectives, respectively.
But there are a variety of disconnects on
both sides about the value of bene?ts in the
workplace. About two-thirds of employers
are not aware of the role bene?ts can play
in achieving their objectives and of the value
they bring to employees. Similarly, only a
third of those surveyed see the value in
offering a wider array of voluntary bene?ts
to employees. Helping employees make
better bene?ts decisions and improving their
?nancial choices are also ranked very low
by employers.
There is a link between bene?ts
and loyalty. Of those employees
with bene?ts surveyed, 57% had
high job satisfaction.
The most important bene?ts for Australian
employees are in the non-insurance area.
Speci?cally, they place high value on ?exible
working hours, training, and employer
contributions over and above the required 9%
to their superannuation fund.
For their part, only one in ?ve employees
said they are satis?ed with their bene?ts.
And nearly all Australian employees say that
bene?ts are not what attracted them to an
employer or what keeps them there.
There is, however, a link between bene?ts
and loyalty. Of those employees with bene?ts
surveyed, 57% had high job satisfaction.
Similarly, employers who feel their employees
are highly satis?ed with their bene?ts also
believe their company is loyal to its employees,
and that their employees are loyal to
the company.
Workplace Financial
Planning: Potential
Interest, Growing Need
Although having enough to retire on is a big
worry for Australians, it is not the only one.
About one-quarter of all employees either live
paycheck to paycheck or have some dif?culty
paying bills. Almost all have some form of
debt, although more than a third have no
debt beyond a car loan or home mortgage.
While about one-third of Australian
employees express con?dence in their ?nancial
management skills, another third express
doubt that they can make the right decision
on ?nancial matters. A third of employees
consider themselves to be a “beginner
investor,” which rises to 42% for those
under the age of 30. Moreover, only 40%
of all Australian employees use a ?nancial
professional — banker, planner or insurance
agent — although this ?gure increases to
about half for those closer to retirement.
Resources and time to care for aging parents or relatives
Appropriate health insurance
Being able to afford quality childcare
Enough money for children’s education
More time to spend with family
Enough money so one can stay home with children
Enough money to buy a home
Enough money to make ends meet
Job security
Enough money to pay bills during sudden income loss
52%
61%
46%
50%
45%
53%
40%
39%
40%
N/A
35%
40%
31%
48%
30%
N/A
27%
48%
21%
36%
Australia U.S.
TOP FINANCIAL CONCERNS OF ALL EMPLOYEES
Percentages have been rounded to the nearest whole number.
2011 STUDY: AUSTRALIA 25
The good news is that there is interest
among employers and employees about
using the services of ?nancial professionals.
More than half of employers said they are
willing to aid employees by offering ?nancial
planning services, including the provision
of personalized advice. This is particularly
true of companies with more than 1,000
employees, a large majority of which also
support employees discussing bene?ts
and ?nancial issues outside the workplace
with professionals.
Conclusion
Australia’s economic engine is humming again
and the island continent’s working population
is con?dent that their ?nancial lot will improve
in the coming years. The country’s excellent
retirement system — the superannuation
fund — has laid the foundation for basic
coverage for the retirement of its workers. But
scratch beneath the surface of this optimism,
and there is a thick layer of worry among
Australian workers of all age groups about
their short- and long-term ?nancial wellness.
Many worry about covering current expenses
and the majority are not saving enough for
retirement. While this concern has yet to
translate into action for most, this presents a
major opportunity for all sides to consider the
expansion of employer-provided bene?ts and
other programs as the primary remedy on the
road to ?nancial security.
Australian companies, moreover, are facing
a potential labor shortage in the coming
two years. This challenge also presents an
opportunity for companies to augment the
bene?ts they provide in order to boost both
employee attraction and retention.
• In bene?t planning, the ?rst step is
education. A majority of employees are
either unaware of the products and
options available to them or lack the
knowledge and con?dence to research
their insurance and savings needs.
Employers and superannuation funds can
stress the value of workplace bene?ts to
employees, such as cost advantages, safety,
simplicity and convenience of voluntary
bene?ts. Employers and the funds can also
get more engaged in ?nancial planning
assistance and discuss the introduction
of ?exible bene?ts that help employees
achieve a better work/life balance.
• To attract and retain workers in the coming
tight labor market, employers that have
employees as customers can explore
both augmented retirement and ?nancial
planning options. Employees need to
understand that their superannuation fund
contributions should be both augmented
and supplemented by other investment
vehicles. There is a real opportunity
to explore more products from the
superannuation fund providers and other
?nancial services ?rms.
• With the economy picking up and the
labor market heating up, Australian
employers have a real opportunity to
explore innovation in bene?ts packages,
including retirement, ?exible and voluntary
bene?ts. Australian workers are still under-
insured and need more options to buy life
insurance, income protection and disability
coverage at the workplace. Innovative
ways to save for retire ment should also
be of great interest to company bene?ts
executives and workers alike.
In bene?t planning, the ?rst
step is education. A majority of
employees are either unaware of
the products and options available
to them or lack the knowledge
and con?dence to research their
insurance and savings needs.
Brazil
Bene?ts at a Glance
4
Government pension is available for men after 35
years’ contribution and for women after 30 years. It
is also possible to apply for the pension bene?t by
age — the pension is available for men older than
65 and for women older than 60. Rural workers
can apply for the bene?t ?ve years earlier. They
must have contributed for at least 180 months. It is
?nanced through mandatory payroll taxes, shared
by the employer and the employee, revenues
from sales taxes and federal transfers that cover
shortfalls of the system. This federal system also
covers survivor and disability pensions. For people
who do not meet the contribution and age criteria,
the government applies an adjustment factor to
arrive at a pension amount. The maximum value
for the pension is R$ 3689.66 (US$: 2,341.16), but
this amount changes according to some conditions,
including amount of contribution during the
employee life, the amount of time contributed and
age at retirement.
As in other countries, private sector employees
would not be able to meet their ?nancial needs in
an extended retirement with just the state pension.
But workers in the public sector are in a different
situation in Brazil. When they retire, they receive
their full salary.
Health care in Brazil is provided by both private and
government institutions. Primary health care remains
the responsibility of the federal government; some
elements of the system, such as the operation of
hospitals, are overseen by individual states. Public
health care is provided to all Brazilian permanent
residents and is free at the point of need (being
paid for from general taxation
5
).
Market Pro?le
1
• 8th largest global economy
2
• GDP of nearly $2.02 trillion: Services (68%);
Industry (26%); Agriculture (6%)
• GDP per capita of $10,900
• Brazil is a fast-growing, free-market-based
emerging economy with large and well-
developed agricultural, mining, manufacturing,
and service sectors; commodity-driven exports
are leading a strong recovery, with China
becoming a major trading partner
• Net in?ows of foreign direct investment:
$48 billion
• Population: 203 million; formal and
informal labor force 92.7 million
3
• Life expectancy at birth: 73.7 years
• Median age: 29 years
1
Sources for this section are either The CIA World Fact Book or
The World Bank or The IMF. All ?gures are in U.S. dollars.
2
(The Economist placed it 7th, ahead of Italy, in 2011)
3
IBGE Census, 2010
4
International Bene?ts Network and the OECD.
5
http://en.wikipedia.org/wiki/Health_in_Brazil
2011 STUDY: BRAZIL 27
BRAZIL, INCLUDED FOR THE FIRST TIME IN OUR
STUDY, IS A RAPIDLY GROWING, DEMOCRATIC
EMERGING MARKET THAT HAS BOTH THE LARGEST
ECONOMY AND POPULATION IN LATIN AMERICA.
Largest Economy in Latin
America Is a Global Success
Story but Workers Are Anxious
About Financial Future
BRAZIL
TOP FINANCIAL CONCERNS OF ALL EMPLOYEES
Being able to afford quality childcare
Enough money so one can stay home with children
Resources and time to care for aging parents or relatives
Enough money to buy a home
Job security
Appropriate health insurance
Enough money to make ends meet
More time to spend with family
Enough money to pay bills during sudden income loss
Enough money for children’s education
68%
48%
67%
61%
65%
40%
65%
53%
62%
48%
60%
50%
60%
39%
57%
36%
47%
N/A
45%
N/A
Brazil U.S.
Percentages have been rounded to the nearest whole number.
It is one of the so-called BRIC countries
that, along with Russia, India and China, are
predicted to dominate the world economy
by mid-century. Current trends seem to bear
out this prediction.
Brazil has abundant natural resources and
strong industrial development potential. With
strong economic growth, Brazil is closing what
was once a wide gap between the rich and
poor.
6
Economic reforms started in 1994 under
the President Itamar Franco government, and
continued by his successor Fernando Henrique
Cardoso, stabilized the Brazilian economy and
strengthened the currency, the real. In 2002,
then President Luiz Inácio Lula da Silva
continued and expanded this path of reform
that has transformed the Brazilian economy.
Despite an increasing standard of living,
however, much of the population still ?nds it
dif?cult to save for the future and must work
longer to maintain quality of life.
The world ?nancial crisis of 2008-2009
did not spare Brazil, which suffered two
quarters of recession as the demand for
commodities dropped by large margins.
But Brazil, thanks to both sound economic
policies and its importance as a world market,
has recovered quickly. Its economy grew
about 7.5% in 2010.
6
This strong turnaround
2011 STUDY: BRAZIL 29
Brazil’s economy grew about
7.5% in 2010.
6
This strong
turnaround and Brazil’s accelerating
growth as a major emerging
market are re?ected in a high
level of consumer con?dence —
the highest in Latin America at
the end of 2010.
7
6
CIA Factbook
7
A Global Nielsen Consumer Report, January 2011, p. 7. www.nielson.com
and Brazil’s accelerating growth as a major
emerging market are re?ected in a high level
of consumer con?dence — the highest in
Latin America at the end of 2010.
7
Our study
found that seven in 10 Brazilian employees
said their ?nancial situation would improve in
six months.
Despite this optimism, our ?ndings show that
the average Brazilian worker also has serious
?nancial concerns. Brazilians are plagued
by high levels of debt and worry about an
inability to pay monthly bills. Our 2011 study
found the following:
• Topping the list of ?nancial concerns for
Brazilians is “having enough money to pay
for their children’s education,” with 68%
saying they are “extremely concerned.”
The second top concern, for 67% of those
surveyed, is “having enough money to pay
bills during sudden income loss” (this is the
number one concern of Americans). Finally,
65% of Brazilians fear not having enough
money to make ends meet, which is tied as
the third top concern with having enough
time for family.
• Brazilians also rate as a number one
concern the impact of a death or illness
on their family’s ?nancial security, with
71% “extremely concerned” about this
possibility (this ranks third for Americans);
and 68% of Brazilians fear their ?nancial
security will be affected because of medical
bills not covered by health insurance (this is
a top concern for American workers).
• Despite this high level of concern, less than
half have taken steps to determine their
life insurance needs. Men tend to do more
planning than women, as well as those
employees who are 31-40 compared to
other age groups.
In general, Brazilians own few ?nancial
products. A savings fund is the most
frequently owned product, but barely half
7
A Global Nielsen Consumer Report, January 2011, p. 7. www.nielson.com
In general, Brazilians own few
?nancial products. A savings
fund is the most frequently
owned product, but barely
half of those surveyed even
have this basic instrument.
While this phenomenon may
have some cultural roots, it is
also a result of the fact that
the country is an emerging
market with a growing yet
modest per capita GDP.
2011 STUDY: BRAZIL 31
of those surveyed even have this basic
instrument. While this phenomenon may have
some cultural roots, it is also a result of the
fact that the country is an emerging market
with a growing yet modest per capita GDP;
many workers have less disposable income to
spend on these products or lack the ?nancial
education to make decisions about buying
them. Many, therefore, rely on their employer
for the bene?ts. Of those who do not own any
products, 71% of those surveyed said that this
is because their employer does not offer them.
Top Workplace Bene?t:
Staying Healthy Is
of Mutual Interest
and Concern
Given this background, employees who do
own ?nancial products are more likely to own
them through the workplace. This can be due
to the reasons cited above as well as the fact
that employers tend to cover some if not all of
the cost when they do offer bene?ts. Health
insurance, life insurance and dental insurance
are the top products owned. However, term
life insurance is more likely to be purchased
outside of the workplace.
Employees do take advantage of the products
that are offered, and those who don’t
have products through the workplace are
interested. At the same time, more than half
of Brazilian employees are very keen to select
bene?ts according to their personal needs.
Of most interest to all Brazilian workers is
health insurance, cited by 90% as the most
essential product. This is followed by life
insurance, dental and medical check-ups.
Companies and workers seem to be on the
same page regarding the desirability and
value of health bene?ts. Of those companies
offering health or dental bene?ts, 63% see an
extremely high value in having an insurance
provider offer information or programs that
help employees stay healthy, and four in 10
offer such assistance.
Moreover, about half of those Brazilian
employers not currently offering health
insurance to their workers said they planned
to do so in the next three years. About three
in 10 employees are interested in purchasing
this product through their employer.
Gasoline ticket
Personal accident insurance
Health check-up
Food benefit
Salary continuation in case of illness
Retirement plan
Grocery ticket
Dental insurance
Life insurance
Health insurance 90%
72%
59%
56%
53%
48%
43%
30%
29%
19%
BENEFITS CITED AS ONE OF TOP FIVE “MOST IMPORTANT” BY EMPLOYEES
Percentages have been rounded to the nearest whole number.
Helping employees make better financial decisions
Helping employees make better benefits decisions
Addressing diverse needs of employees
Reducing HR administrative costs
Retaining employees
Attracting employees
Controlling health and welfare benefit costs
Increasing employee productivity
Increasing employee job satisfaction
83%
79%
82%
82%
78%
87%
73%
66%
73%
84%
65%
61%
63%
52%
58%
69%
57%
56%
Brazil U.S.
MOST IMPORTANT BENEFITS OBJECTIVES OF ALL EMPLOYERS
Companies are also interested in supporting
their workers’ quest for work/life balance;
in fact, it is the number one employee
bene?t strategy among those who already
offer bene?ts. Nearly 70% of employers are
interested in providing bene?ts that improve
the work/life balance of their workers. Such
bene?ts include job sharing, ?exible working
hours and telecommuting.
Brazilian women tend to have higher ?nancial
concerns and are even less ?nancially prepared
than men for retirement and other objectives.
Both domestic companies and foreign multi-
nationals should pay attention to their female
workers. They represent a growing segment
of the working population in Brazil: the active
female working population grew on average
3.6% per year from 2001 to 2008, while the
male working population grew only by 1.9%.
Furthermore, from 2000 to 2006, the per
capita income for women grew 7.3%,
compared to 2.6% for men in the same
period.
8
It is also important to note that, in
Brazil, men earn more than women for the
same work. This trend is changing, though,
and women workers are catching up.
Worker Loyalty and
Bene?ts: Making a
Stronger Connection
The top bene?ts objective of Brazilian
employers who offer bene?ts is to increase
the job satisfaction and productivity of their
workers. Keeping workers happy in their jobs
is cited by 83% of Brazilian companies as
their number one objective (the fourth top
objective for U.S. companies).
Nearly equal importance is given to the goal
of increasing productivity, which follows
at 82% (this ranks third for American
employers). More than half of all companies
said they had increased their productivity.
Employee retention ranks fourth for
companies with bene?ts programs (73%
cite it as extremely or very important).
Interestingly, retaining employees is the
number one objective among employers
who do not offer employee bene?ts — a full
93% say they are extremely concerned, tied
with increasing employee job satisfaction.
Percentages have been rounded to the nearest whole number.
2011 STUDY: BRAZIL 33
And among all employers, three-quarters
rate attracting and retaining employees as
extremely or very important.
As with other countries in the survey, there
is a potential disconnect for employers, who
apparently underestimate the tie between
offering bene?ts and attaining objectives.
Like their counterparts elsewhere, Brazilian
employees with workplace-provided bene?ts
express higher job satisfaction and loyalty to
their employer. This disconnect is magni?ed
when one takes into account that 30% of all
employers from diverse sectors in Brazil expect
a shortage of labor in the near future.
Nearly 70% of all companies agree with the
idea that they have strong loyalty to their
workers, while only 49% of the latter feel
this way. And the reverse seems to be true
as well, with 72% of employees professing
loyalty to the company, while only 48% of
management feel this is so.
Clearly, offering bene?ts could help companies
not only achieve their top goals — whether
those are retaining employees or making them
happy — but also overcome a divergence of
views on loyalty. Closing this gap is important
for both worker morale and productivity,
especially since 69% of all workers are worried
about being able to afford the bene?ts
package that is right for their family.
Voluntary bene?ts could play a role in the
Brazilian workplace. Employers see advantages
to voluntary bene?ts for their employees, where
the ease of enrolling in workplace bene?ts
provides employees with the best products
and rates as well as having a payroll deduction,
which is a convenient way for employees to
make payments. About half of all employees
see voluntary bene?ts as a convenient way to
save and to pay for products.
Retirement /Financial
Security: Planning
to Retire but
Not Planning for It
As in other parts of the world, development
and economic growth have positively affected
longevity in Brazil. Life expectancy increased
more than 10 years since 1980, to 73.7 years,
and it is projected to increase nearly another
eight years by 2050.
8
Brazilians, like others in many parts of the
world, are not doing enough to prepare for
retirement. The average Brazilian worker
intends to retire at 56 years; yet only three in
10 have taken any steps to determine their
retirement income needs and only one in four
has a private retirement plan.
This inaction comes despite the fact that
Brazilians have — like Mexican and Indian
workers in this study — serious ?nancial
concerns about their future. Seventy percent
of Brazilian workers say they are extremely
Employees with Benefits Employees without Benefits
Employees have strong loyalty to company
Company has strong loyalty to employees
Employees are satisfied with their job
64%
55%
75%
65%
52%
42%
JOB SATISFACTION AND LOYALTY TO COMPANY AMONG EMPLOYEES WITH BENEFITS
Percentages have been rounded to the nearest whole number.
8
http://www.ibge.gov.br/english
concerned about being able to afford health
care in retirement, while 69% are worried
about outliving their retirement savings (also
the second main retirement concern for
U.S. workers).
A majority of Brazilian workers (63%) are also
concerned about having enough ?nancial
resources to take care of their aging parents
or relatives. Our study found that more
than half of older Brazilian employees are
concerned about becoming a burden on their
children. Financing their own long-term care
needs is cited as a major worry by 62% of
Brazilians. Of those Brazilians who take care
of dependent parents, 70% are living from
paycheck to paycheck.
This lack of saving for retirement could have
multiple causes. First, it’s a question of cash ?ow
and af?uence. Many simply cannot afford to
save money for their golden years and put food
on the table day in, day out. As the Brazilian
middle class grows, this should improve.
Second, Brazilians are likely counting on their
government-sponsored pension to cover
their costs and needs in retirement. There is
an expectation that this state pension will
be enough, despite the fact that Brazilians
are living longer.
Third, Brazilians have a lackluster track record
of saving. According to a 2009 report from
the Economist Intelligence Unit, Brazil ranked
last among 24 countries with a savings rate
of only 15% of gross domestic product. This
compared to 54.5% for China; 31% for India;
24% for Argentina; and 21.7% for Mexico.
The bright spot is that education on ?nancial
planning could help Brazilians overcome
these obstacles. While two-thirds of Brazilian
employees say they are con?dent in their
ability to make the right ?nancial decisions,
more than a third have limited time to do
the research or consider themselves to be
beginner investors, and thus probably in need
of planning assistance.
About half of Brazilian workers who already
receive bene?ts said they are interested in
their employers providing access to ?nancial
planners to help with retirement issues as well
as bene?ts plans advisors. But companies will
need some persuading as four in 10 responded
that they would not consider any ?nancial
education as a bene?t for their employees.
Having to work full-time or part-time
to live comfortably in retirement years
Providing for your spouse’s long-term care needs
Providing for your own long-term care needs
Having enough money to take care of elderly parents or in-laws
Outliving retirement money
Being able to afford health care in retirement years
70%
N/A
69%
52%
63%
35%
62%
45%
58%
N/A
57%
47%
Brazil U.S.
EMPLOYEES’ TOP FINANCIAL CONCERNS REGARDING RETIREMENT
Percentages have been rounded to the nearest whole number.
2011 STUDY: BRAZIL 35
Conclusion
Brazil is a major force in both its own
region, where it is the largest economy
and has the largest population, and in the
global marketplace, where it belongs to
that exclusive club of high-growth BRIC
countries. Brazil is also the largest insurance
market in Latin America and one of the
fastest growing. A net external creditor
since 2008,
9
Brazil will only become a more
in?uential economic player as it transitions
from an emerging market to a developed
one in the coming years. The country has an
impressive combination of natural resources,
commodities and high value-add industrial
manufacturing.
As Brazil develops economically and its middle
class grows, there will likely be an impact on
the labor market, workplace bene?ts and
what other options employers are willing
to provide for their workers. Both domestic
companies and foreign multinationals still
enjoy a buyer’s market for labor but this, too,
is beginning to change as 30% of companies
expect an imminent labor shortage. To stay
ahead of the curve on bene?ts strategies,
domestic and international HR and bene?ts
managers should look at the following
options in Brazil.
• Focus on ?nancial education: Brazilian
workers are living longer but not saving
for retirement. This is an opportunity for
bene?ts providers to work with companies
on ?nancial planning and education for
employees, who have expressed an interest
in obtaining advice. As the middle class
grows in Brazil, the market for income
supplements to the government pension
could also increase.
With education about ?nancial planning,
employees will have a better understanding
of the products that can lead them to a
more secure retirement. If they have the
tools to prepare for a more ?nancially
sound future, they can ease the stress of
becoming a burden on children.
• Emphasis on voluntary bene?ts: Bene?ts
providers could show employers how
voluntary bene?ts will not add to their
costs but still enable them to offer more
bene?ts to employees. This will also help
with their key employee objectives —
job satisfaction and employee retention.
Since few Brazilian employers offer
“executive” bene?ts, companies could
consider starting with voluntary bene?ts
for these key employees since they may
have more ?nancial capacity to pay the
costs of the bene?ts.
• Financial independence for women
workers: Both domestic companies and
foreign multinationals would do well
to pay attention to the goals of their
female employees. Brazilian women are
increasingly an important segment of the
workforce and will have more disposable
income as they achieve middle class status.
Bene?ts providers have an opportunity to
educate the female employee population
on ?nancial planning to ensure a secure
?nancial future.
Offering bene?ts could help
companies not only achieve their
top goals — whether those are
retaining employees or making
them happy — but also overcome
a divergence of views on loyalty.
9
https://www.cia.gov/library/publications/the-world-factbook/geos/br.html
India
2011 STUDY: SECTION 37
Bene?ts at a Glance
Retirement bene?ts are dominated by a
government-mandated employer bene?t called the
Gratuity, by which every employee, upon leaving
his or her employer after more than ?ve years of
service, collects 15 days of last drawn salary for
each year of service.
Workers may also save for retirement with a tax-
favored vehicle called a Public Provident Fund, to
which some employers also contribute.
The life insurance market is dominated by the
government-owned Life Insurance Corporation of
India, but private insurers continue to enter the
Indian market, as joint venture partners or minority
stakeholders in ?rms.
The Pension Fund Regulatory and Development
Authority is expected to pave the way for more
modern ?nancial products. In its current form,
it offers the cheapest accumulation vehicle for
building a retirement nest egg. However, it has
seen limited success since the distributors’ bene?t
in offering this as a solution is limited.
Post of?ces have been offering monthly income
products which give a guaranteed payout and
are widely accepted as an effective tool to derive
an income.
Life insurance companies have been offering
annuity products. However such products
contribute only about 2% of the product mix
for the industry.
Market Pro?le
1
• 11th largest global economy
• GDP of $1.4 trillion: Services (55%);
Industry (29%); Agriculture (16%)
• GDP per capita of $3,400
• Major emerging economy with rapid growth;
poverty is pervasive
• Foreign direct investment net in?ows
$34.5 billion
• Population 1.15 billion;
labor force of 478 million
• Life expectancy at birth 66.8 years
• Median age 25 years
1
Sources for this section are either The CIA World Fact Book or The World Bank or The IMF. All ?gures are in U.S. dollars.
2011 STUDY: INDIA 37
MOST IMPORTANT BENEFITS OBJECTIVES OF ALL EMPLOYERS
2
http://www.chinadaily.com.cn/opinion/project/2011-01/11/content_11826903.htm
3
http://www.worldbank.org.in/WBSITE/EXTERNAL/COUNTRIES/SOUTHASIAEXT/INDIAEXTN/0,,contentMDK:20195738~pagePK:141137~piPK:141127~
theSitePK:295584,00.html
WITH A POPULATION OF MORE THAN ONE BILLION,
INDIA IS THE WORLD’S LARGEST DEMOCRACY AND IS
EXPECTED TO BE THE MOST POPULOUS COUNTRY BY
MID-CENTURY.
2
India’s Economic Growth
Transforming Society
and Raising Expectations
INDIA
Reducing HR administrative costs
Retaining employees
Addressing diverse needs of employees
Attracting employees
Increasing employee job satisfaction
Helping employees make better financial decisions
Controlling health and welfare benefit costs
Increasing employee productivity
91%
82%
88%
87%
87%
56%
86%
79%
86%
66%
79%
52%
76%
84%
68%
61%
India U.S. Percentages have been rounded to the nearest whole number.
India has a burgeoning middle class and a
rising standard of living, but poverty remains
a major challenge and social issue. About
410 million people, more than one-third of
the country, live in poverty, which has a large
impact on the labor market and attitudes
toward ?nancial security, retirement and
workplace bene?ts.
3
India’s economic rise is a genuine success
story and an engine of transformation for
both its society and global markets. India’s
economy grew at least 7% annually for
more than a decade, making it a global
economic powerhouse and a core member of
the informal club of high-growth emerging
markets known as “BRICs” (along with Brazil,
Russia and China). Of course, India was not
immune to the global economic crisis of 2008-
2009; but in a display of resilience, the Indian
economy nevertheless rebounded strongly in
2010, with more than 8% growth, driven in
large part by domestic demand.
India’s services sector, including outsourcing,
is a major source of its economic growth,
with both domestic companies as well as
many multinational companies investing in
and setting up operations there in recent
years. In particular, the presence of foreign
multinationals, which often offer a more
generous or diverse set of bene?ts, is
contributing to a changing bene?ts landscape
in India over the long term.
2011 STUDY: INDIA 39
In part because of the country’s
strong economic performance
and the rise of its middle class,
Indian employees are very
con?dent and optimistic.
In part because of the country’s strong
economic performance and the rise of its
middle class, Indian employees are very
con?dent and optimistic. India topped a
global consumer con?dence study released in
early 2011, though this ?gure marked a drop
from its record high in 2006. Indians remain
worried about in?ation, possibly due to rising
global food and commodity prices.
4
When discussing attitudes of employers and
employees toward workplace bene?ts in India,
it is essential to bear in mind that the country
has a surplus of labor, a young population and
a culture — similar to that in Mexico/Brazil —
of extended families taking care of aging
parents and elderly relatives.
Workplace: Labor
Surplus and Cost
Limiting Bene?ts
While foreign multinationals have caused
wages to rise in certain sectors and are
in?uencing the types of bene?ts offered,
Indian employers nevertheless continue to
provide only a limited bene?t offering to their
employees. With the exception of health and
critical illness insurance, less than half of all
employers offer any other products. The labor
surplus and cultural factors, plus the cost of
bene?ts, continue to play a role here and
in?uence employer attitudes as they did in the
?rst survey four years ago.
• Increasing employee productivity (91%)
and controlling health and welfare bene?t
costs (88%) are the top two bene?ts
objectives of those companies providing
bene?ts. This is slightly down from the
96% level for both in our 2007 study.
While also of high concern to employers,
attracting and retaining employees
Increasing employee
productivity (91%) and
controlling health and
welfare bene?t costs
(88%) are the top two
bene?ts objectives of
those companies providing
bene?ts. Those employers
who offer bene?ts could
reap the reward of higher
worker productivity.
4
http://www.nielsen.com/content/dam/corporate/us/en/reports-
downloads/2011-Reports/Nielsen%20Global%20Consumer%20
Con?dence%20Report%20-%20Q1%202011.pdf
2011 STUDY: INDIA 41
nevertheless rank near the bottom as
reasons to offer bene?ts.
• Indian employees, even those without
bene?ts, express high satisfaction with their
jobs and are very loyal to their employer.
Seventy-two percent of employees say
they are satis?ed with their jobs, which is
unchanged from four years ago. Employee
and employer views on company loyalty
are also aligned, with 67% of employees
and 65% of employers agreeing that the
“company has strong loyalty to employees.”
• Seventy-?ve percent of those Indian
employees who do not own any ?nancial
products through the workplace say
it is because they are not offered by
their employer.
Those employers who offer bene?ts could
reap the reward of higher worker productivity,
the study found. While 57% of all companies
said productivity had increased in the past
year, the number jumps to 68% for those
companies offering bene?ts.
Financial planning is another bene?t that,
while currently eschewed by employers, could
improve productivity and job satisfaction
while enhancing the ?nancial security of
employees. More than half (56%) of all
employees consider themselves novice
investors, and an equal number is interested
in employer-provided ?nancial advice,
including for retirement.
A majority of employers and their workers
agree on the advantages of voluntary
bene?ts, an attitude consistent with the
results of the ?rst survey. Fifty-two percent
of companies view voluntary bene?ts as a
cost-effective way to meet diverse needs of
their workforce, while employees value the
convenience of obtaining them through the
workplace (58%) and trust their employer as
a source of objective information (51%).
India U.S.
65%
53%
62%
48%
62%
36%
60%
50%
59%
48%
59%
61%
58%
N/A
56%
40%
56%
N/A
55%
39%
Enough money to buy a home
Enough money so one can stay home with children
More time to spend with family
Being able to afford quality childcare
Enough money to pay bills during sudden income loss
Enough money for children’s education
Job security
Resources and time to care for aging parents or relatives
Appropriate health insurance
Enough money to make ends meet
TOP FINANCIAL CONCERNS OF ALL EMPLOYEES
Percentages have been rounded to the nearest whole number.
• Two-thirds of all employees in India
are extremely concerned about loss of
income from premature death or disability,
down from 81% in 2007 but still higher
than the level of concern of their U.S.
counterparts (51%).
Despite this acute concern over ?nancial
security, Indian employees own few ?nancial
products and are not taking steps to protect
themselves. Only 45% of Indian employees
have assessed their household’s health
insurance needs, although this increases to
62% for employees 51 years and older.
The sole exception is life insurance, where
more than 80% have taken steps to ascertain
their needs. The majority of employees
with life insurance purchase it outside the
Financial Security/
Retirement: A Bene?ts
Market in Its Infancy
Indian employees have signi?cant and wide-
ranging ?nancial concerns, with basic needs
topping the list. Interestingly, our 2011 results
represent double digit improvements over four
years ago — and are thus in line with the high
levels of optimism and con?dence among
Indian employees.
• “Having enough money to make ends
meet” is cited by 65% of Indian employees
as their number one ?nancial concern; this
is an improvement of 15 points from four
years ago; Indian employees 51 years and
older are somewhat less concerned with
making ends meet (54%), which is virtually
at parity with the level of concern of their
U.S. counterparts (53%).
• Having the right health insurance is the
second top concern, but dropped 20 points
from four years ago to 62% today (48%
of American workers cite this as a high
concern); Indian employees cite having
enough resources and time to care for
relatives as their third top concern — this,
too, improved by 17 points to 62% today.
Though retirement looms as
a source of ?nancial 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.
India U.S.
62%
N/A
60%
47%
60%
45%
59%
52%
57%
N/A
55%
35%
Having enough money to take care of elderly parents or in-laws
Providing for your spouse’s long-term care needs
Outliving retirement money
Providing for your own long-term care needs
Having to work full-time or part-time
to live comfortably in retirement years
Being able to afford health care in retirement years
EMPLOYEES TOP FINANCIAL CONCERNS REGARDING RETIREMENT
Percentages have been rounded to the nearest whole number.
2011 STUDY: INDIA 43
workplace, while health insurance is obtained
predominantly through one’s employer.
Though retirement looms as a source of
?nancial worry, few Indian employees are
taking steps to prepare for it. Life expectancy
overall is 66.8 years in India, a major improve-
ment in the last several decades but still the
lowest of the ?ve countries in this survey.
Only one in four Indians has taken any steps
to prepare for retirement and even fewer —
one in six — have begun planning for it.
Cultural factors could be at work here. Fully
half of all Indian employees say they do not
plan to retire. This could re?ect the relatively
young age of the working population, an
ambitious, entrepreneurial and interested
group highly motivated to improve their
standard of living.
This 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% of
employees in India say they are extremely
concerned about having enough money
to provide for elderly parents or in-laws.
Thus, younger workers could be planning to
continue in their jobs in later years to support
their aging parents and relatives. With
economic development and a more mobile
society, this tradition, however, is changing.
85%
15%
No
Yes
EMPLOYEES WHO HAVE DONE ANY
PLANNING FOR RETIREMENT
Regional Differences:
It’s a Big Country —
Adapt Your
Bene?ts Strategy
Signi?cant regional differences exist in
India when it comes to workplace bene?ts.
Opportunities abound in all the markets,
though to varying degrees and regarding
different products. In descending order of
population size:
• Mumbai: Employers and employees in
India’s largest city
5
(16.3 million inhabitants)
are relatively less receptive to bene?ts,
though a majority of companies offer
packages to executives. Employees in
this city on the northwestern coast are
signi?cantly unprepared for their retire-
ment but are very interested in receiving
retirement advice at work. Retirement
planning may be bene?cial for this market.
• Kolkata: Employers in India’s second largest
city (13.2 million), located in the northeast
near the border with Bangladesh, are least
positive about bene?ts and their employees
have low job satisfaction. There is an
opportunity here for bene?ts providers to
educate employers in Kolkata about the
direct connection between better bene?ts
and improved employee satisfaction.
• Delhi: The national capital and third-largest
city (12.8 million) is most receptive, as
employers are positively inclined toward
bene?ts, and employees have high ?nancial
concerns and high interest and receptivity
toward bene?ts. Employees have the
highest interest in receiving ?nancial,
bene?ts and retirement advice at work.
Financial advice based on life stage may be
a good opportunity for this city.
• Chennai: Employees in this city of 6.4
million on the southeastern coast expect
to retire but few have done any planning.
About half are interested in having their
employer provide advice for retirement.
For bene?ts providers, retirement planning
may be a good opportunity in this market
as well, but employers are going to be
a challenge.
• Bangalore: Employers in the ?fth largest
city in India (5.6 million) — a center for
software development and outsourcing
in the southern middle of the country —
offer relatively few products to their
employees. No surprise then that workers
in Bangalore own fewer ?nancial products.
Both groups are also less open to voluntary
bene?ts. Employees indicate some interest
in professional help in ?nancial matters.
Financial planning may therefore be a good
offering for this market.
• Hyderabad: Employees in this city of
5.5 million in southern Andhra Pradesh
State tend not to consult with ?nancial
professionals but express an interest in
getting ?nancial advice through work.
Employers are receptive to offering
?nancial advice and are also positive
regarding employee bene?ts. Financial
planning is a way to enter this market,
and the education of employers and
employees on the advantages of voluntary
bene?ts is critical.
• Ahmedabad: Employees in this city of
4.5 million north of Mumbai plan to
retire but few have done any planning.
More than six in 10 are interested in
having their employer provide advice for
retirement. Interest in voluntary bene?ts is
low. Retirement planning may be a good
opportunity in this market as well.
5
http://www.citymayors.com/gratis/indian_cities.html. This site is source for all Indian city pop. ?gures.
2011 STUDY: INDIA 45
Conclusion
India is already a major force in the global
economy, and this position will solidify and
strengthen as the country transforms itself
from an emerging market to a developed one
in the coming years. Domestic companies are
creating jobs in diverse industries from steel
and automobiles to software development
and agribusiness. Foreign multinationals
continue to ?ock to India for its well-
educated, English-speaking and, until now,
comparatively inexpensive labor force.
As India develops economically and more
of its citizens join the middle class, the
labor market, workplace bene?ts and what
employers are willing to provide for their
workers could be affected. Both domestic
companies and foreign multinationals still
enjoy a buyer’s market for labor but this,
too, is beginning to change. To stay ahead
of the curve on bene?ts strategies, domestic
and international HR and bene?ts managers
should look at the following options in India:
• Offering a wider array of bene?ts or
making basic bene?ts more available may
help employers reach their number one
bene?ts objective, which is increasing
worker productivity. Health insurance and
term life insurance are low-hanging fruit
because they are viewed as core products
by a majority of employees and with
proper management can help companies
achieve their second top goal — cost
control of health and welfare bene?ts.
• With the majority of employees both
concerned with and unprepared for
retirement, companies should consider
providing retirement planning services and
?nancial education as a bene?t option.
India’s strong economic growth has
made its workforce more mobile, which
is affecting the tradition of older Indians
being cared for by their children. In this
context, companies can take the lead in
addressing this trend by helping employees
understand what they need to secure their
?nancial and retirement future.
• Exploring the addition of voluntary
bene?ts — with most or all of the cost
picked up by employees — could help
both sides achieve their ?nancial goals.
Since there is overall a strong mutual
consensus about the utility of having access
to voluntary bene?ts, companies should
seriously consider expanding their offerings
to employees to include high-interest
items, including life insurance.
None
Maternity allowance
Company car
Education loan
Housing allowance
Paid vacation
Gratuity
Bonus
Provident fund 76%
73%
56%
51%
39%
22%
11%
10%
10%
OFFERINGS TO EMPLOYEES BY EMPLOYERS
Percentages have been rounded to the nearest whole number.
Mexico
Bene?ts at a Glance
A mandatory retirement savings system is paid
for by employers, at 2% of wages, and managed
in individual investment accounts by registered
organizations known as Afores. In 2009, the
government adopted reforms allowing the Afores,
which manage about $100 billion in assets, to gain
access to local private equity funds.
3
Mexico has a decentralized national health system,
but employees who can afford private care tend to
use it and buy insurance for it.
Market Pro?le
1
• 14th largest global economy
• GDP of nearly $1 trillion: Services (63%);
Industry (33%); Agriculture (4%)
• GDP per capita of $9,700
• Free market economy hard hit by the global
?nancial crisis but rebounding in 2011;
mix of modern and outmoded industries,
and the world’s 7th largest oil producer
• Net in?ows of foreign direct investment:
$13.9 billion
• Population 112 million
2
;
labor force 57.8 million
2
• Life expectancy at birth: 76.4 years
• Median age: 27.1 years
1
Sources for this section are either The CIA World Fact Book or The World Bank or The IMF. All ?gures are in U.S. dollars.
2
Source: INEGI 2011 (Instituto Nacional de Geografía y Estadística)
3
Private Equity Manager, 3/9/11
2011 STUDY: MEXICO 47
4
http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/0,,pagePK:180619~theSitePK:136917,00.html
5
World Bank, ibid
6
http://hk.nielsen.com/documents/GlobalConsumerCon?denceReport_Q42010.pdf
MEXICO, THE SECOND LARGEST ECONOMY IN LATIN
AMERICA,
4
EXPERIENCED THE GLOBAL FINANCIAL
CRISIS IN 2008-2009 WITH PARTICULAR FEROCITY.
Two Steps Forward,
One Step Back
as Country Copes
With Economic Crisis
MEXICO
TOP FINANCIAL CONCERNS OF ALL EMPLOYEES
Being able to afford quality childcare
Resources and time to care for aging parents or relatives
Enough money so one can stay home with children
Enough money to buy a home
Enough money to make ends meet
Appropriate health insurance
More time to spend with family
Enough money for children’s education
Job security
Enough money to pay bills during sudden income loss
73%
61%
71%
50%
69%
48%
68%
40%
67%
48%
65%
53%
59%
39%
57%
N/A
56%
36%
47%
N/A
Mexico U.S. Percentages have been rounded to the nearest whole number.
Mexico’s robust growth from 2004 to 2007 —
when the ?rst edition of this trends study was
published — gave way to a major contraction
of 6.5% in 2009. The country is slowly climbing
out of this hole with growth projected at
4.5% for 2010 and 3.8% for 2011.
The global recession has highlighted economic
fault lines in Mexico — close to half of all
Mexicans still live in poverty
5
— and both
the government and private sector have a
major challenge to create the growth that will
broaden prosperity for a wider swath of the
population. A full and realistic discussion of
employee bene?ts in Mexico should take this
socio-economic environment into account.
Consumer con?dence in Latin America as a
whole is increasing, with the region ranking
the highest in optimism in recent surveys. In
Mexico, con?dence is also on the rise, but it is
still four points below the global average and
well behind Brazil — the other Latin American
economy in our survey.
6
Financial hardship
persists and Mexican consumers continue to
have dif?culty paying bills and reducing debt.
Having enough money to pay bills led the list
of Mexican workers’ top concerns of ?nancial
security. A full 73% say they are “extremely
concerned” about having enough money
during sudden income loss.
Despite growing anxiety about their ?nancial
future, many Mexican workers say they are
not taking steps to address these concerns.
Less than half have taken any action to
determine their household’s life insurance
needs and only a quarter have looked into
their disability insurance options.
2011 STUDY: MEXICO 49
Despite growing anxiety about
their ?nancial future, many Mexican
workers say they are not taking
steps to address these concerns.
Cultural factors — such as a widespread
tendency to avoid planning for the future —
play a role, as does the fact that Mexican
employers are reluctant to offer bene?ts
beyond those mandated by law.
A Direct Correlation:
Bene?ts, Loyalty and
Job Satisfaction
As in our 2007 study, there is a strong
correlation between employer-provided
bene?ts and job satisfaction and loyalty to
one’s employer. The top bene?ts objective
for Mexican employers is to increase
employee productivity (97% of all employers),
with the second main goal of improving
job satisfaction (91%) — both results are
essentially unchanged from four years ago.
These objectives and percentages, our
study shows, are essentially the same for
employers who do not offer bene?ts.
In 2011, 83% of employees with bene?ts
said they were satis?ed with their current job,
compared to 59% of those who did not receive
on-the-job bene?ts. The overall job satisfaction
rate — with or without employer-provided
bene?ts — is 72%, down from 81% in the
2007 study but still relatively high, indicating
that the Mexican labor market favors employers.
Employees who receive bene?ts express a
stronger sense of loyalty to their employers —
73% — compared to those who do not,
at 55%. The overall loyalty ?gure is 64%.
Employees also regard this as a sign of
employer loyalty to their workforce with 64%
of employees with bene?ts saying so. And
56% of employees who receive bene?ts cite it
as a reason they stay with their company.
It should also come as no surprise, then,
that employees who work for a company
with bene?ts on average stay longer with
that company: 7.1 years versus 5.2 years for
employees who work at companies that do
not offer bene?ts.
MOST IMPORTANT BENEFITS OBJECTIVES OF ALL EMPLOYERS
Helping employees make better financial decisions
Helping employees make better benefits decisions
Reducing HR administrative costs
Retaining employees
Addressing diverse needs of employees
Attracting employees
Controlling health and welfare benefit costs
Increasing employee job satisfaction
Increasing employee productivity
97%
82%
91%
79%
87%
87%
85%
66%
83%
52%
82%
84%
78%
61%
76%
69%
70%
56%
Mexico U.S. Percentages have been rounded to the nearest whole number.
2011 STUDY: MEXICO 51
A New Solution
on the Horizon:
Voluntary Bene?ts
Many Mexican employers only provide those
bene?ts that are mandated by law, citing high
cost as the reason for not providing more
?nancial products and bene?ts. The burden
of paying for these products, especially life
and health insurance products, is shouldered
predominantly by the employer. Though
overall ?nancial product ownership is relatively
low throughout Mexico, the workplace is
nevertheless where most Mexican employees
purchase their ?nancial products, especially
those in larger companies and in higher
income brackets.
Moreover, there is growing interest among
employees of all types in getting greater
access to bene?ts and products.
Those currently without bene?ts are interested
in purchasing ?nancial products through the
workplace. Life insurance, savings plans, health
insurance and disability insurance were the top
four products of interest to these employees.
Adding voluntary bene?ts is also of high
interest to 56% of those employees surveyed
who currently enjoy some bene?ts in the
workplace. There could be an advantage
for both employer and employee in setting
up programs of voluntary bene?ts for the
workforce. The addition of a voluntary bene?t
program could help employers achieve their
key goals of improving job satisfaction and
employee retention.
Retirement/Financial
Security: More Planning
and Education Needed
Mexico introduced its state pension fund
system — the Afore — more than 10 years
ago to aid Mexican workers in funding their
retirement. Collectively, Mexican Afores
have about $100 billion in assets under
management.
7
But as we saw in Australia
with the super annuation fund, this source
of pension income will most likely not be
suf?cient as Mexicans are living longer.
Average life expectancy in Mexico is 76 years,
EMPLOYEES’ TOP FINANCIAL CONCERNS REGARDING RETIREMENT
Having enough money to take care of elderly parents or in-laws
Providing for your own long-term care needs
Providing for your spouse’s long-term care needs
Outliving retirement money
Having to work full-time or part-time
to live comfortably in retirement years
Being able to afford health care in retirement years
75%
N/A
73%
47%
69%
52%
69%
N/A
65%
45%
58%
35%
Mexico U.S.
7
“A Less Taxing Mexico,” Private Equity Manager, March 9, 2011
Percentages have been rounded to the nearest whole number.
relatively close to that of its northern NAFTA
neighbors, the United States (78 years)
8
and
Canada (81 years).
9
Given their longevity, Mexicans are justi?ably
concerned about retirement. But more than
one third of those surveyed (36%) don’t know
at what age they will retire. For those who
expect to retire, the median age they cite is
60 years.
The top three ?nancial concerns about
retirement are:
• “Being able to afford health care in
retirement years”— 75%, up from 71%
four years ago.
• “Having to work full-time or part-time
to live comfortably in retirement”—
with 73% citing this as a top concern,
basically unchanged from our previous
study and compared to 47% of U.S.
workers surveyed.
• The third top concern is “outliving
retirement money,” with 69% of Mexican
workers citing this, up slightly from 67%
in 2007 and compared to 52% of their
U.S. counterparts.
8
http://www.cdc.gov/nchs/fastats/lifexpec.htm
9
http://www.cbc.ca/news/health/story/2010/02/23/life-expectancy-canada.html
10
Study of International Employee Bene?ts 2007, p.28
11
http://www.buyusa.gov/mexico/en/?nancial_insurance.html
76%
24%
No
Yes
EMPLOYEES WHO HAVE DONE ANY
PLANNING FOR RETIREMENT
Percentages have been rounded to the nearest whole number.
Insurance Market:
Large Potential with
Regional Differences
Mexico is the second largest insurance market
in Latin America after Brazil. According to the
Mexican Association of Insurance Services,
insurance services have until now experienced
low market penetration in Mexico, representing
only 1.9% of the total GDP, compared to 12%
for the United Kingdom, 9% for the U.S., and
4% for Chile.
11
Given the large market and
low penetration, there is a huge potential for
insurance services in Mexico.
This market potential was noted in our
2007 study and recon?rmed by our current
results. In 2011, only 41% of employees
surveyed have taken any steps to determine
their life insurance needs, while only 24%
have researched their households’ disability
insurance requirements. But there is interest
among Mexican employees who do not
currently have bene?ts through their company
to purchase ?nancial products through
the workplace.
But employee bene?ts providers should
take into account the signi?cant regional
differences that exist in Mexico’s key urban
industrial centers that were surveyed: Mexico
City, Guadalajara, Monterrey and Leon
(new for the 2011 study). Mexico City and
Monterrey tend to have larger companies,
while Guadalajara is home to mid-sized ?rms
and Leon to smaller businesses. Company
size affects the kind and quantity of bene?ts
offered as well as the type of employees hired.
• Mexico City: Employees have the highest
?nancial concerns of those surveyed.
They are interested in getting products
through their employer but do not see the
advantages of voluntary bene?ts. However,
Despite this high level of concern, only one
in four Mexican employees has done any
planning for retirement or taken any steps
to determine what their needs would be in
retirement. This is still an improvement over
the previous study, when only one in ?ve had
done any retirement planning.
10
Among those
employees who have planned for retirement,
about half said they are either on track or
have achieved their goals.
Though society is changing, the extended
family continues to play a central role in
Mexican culture and has an impact on
retirement. Since one in ?ve Mexicans
currently has parents who depend on them
?nancially, most employees are also concerned
about long-term care needs for their parents,
as well as for themselves and their spouses.
With most Mexican employees owning only a
few ?nancial products acquired through the
workplace, it is clear that ?nancial planning
continues to elude the majority of workers.
But both employees and employers have
shown interest in bringing ?nancial planning
and education to the workplace.
Of the employees who own a ?nancial product
through the workplace, 62% expressed
interest in employers providing the services of
?nancial planners (72% for larger companies).
This aligns with the Mexican employers’ most
important bene?t strategies where retirement,
general ?nancial planning and retirement
education rank in the top four.
Among those employees who
have planned for retirement, about
half said they are either on track
or have achieved their goals.
2011 STUDY: MEXICO 53
employers don’t offer many bene?ts and
are not that interested in offering more in
the near future. But many are concerned
about a workforce shortage, so educating
employers about the link between bene?ts
and retention might be a good strategy in
Mexico City. Educating employees about
the advantages of voluntary bene?ts might
help as well.
• Guadalajara: Employers offer more bene?ts
than required by law, and employees are
more inclined to own bene?ts through
work. But there is a high level of ?nancial
concern among employees, with more than
half saying they don’t know when they will
retire and almost 90% having taken no
steps to plan for retirement. Workers are
more interested in voluntary bene?ts and
?nancial planning, so education would
also work as a strategy in this city.
• Monterrey: Employers tend to offer only
those bene?ts required by law. But they
have a somewhat positive attitude toward
voluntary bene?ts and ?nancial planning.
Employees in this city are less con?dent in
making ?nancial decisions and signi?cantly
unprepared for their retirement. Retirement
planning may be bene?cial for this market.
Education of employers and employees
on the advantages of voluntary bene?ts
is crucial.
• Leon: Although employers in Leon offer
basically only those products required
by law and not much more, they face a
possible worker shortage. Employees tend
to own products through work and are
positively inclined to voluntary bene?ts.
They have moderate ?nancial concerns,
with 60% not prepared for retirement.
Education on voluntary bene?ts and
?nancial planning could be a door opener
in this city.
Conclusion
As Mexico returns to the path of economic
growth, companies will have the opportunity
and challenge of revisiting and revising their
bene?t strategies and offerings. Mexico is
the second largest economy and insurance
market in Latin America, so there will be
large potential for bene?ts providers to gain
market share if they have the right approach
and product set, and tailor this to the existing
regional differences this report has outlined.
TOP BENEFITS STRATEGIES OF EMPLOYERS THAT OFFER BENEFITS
Outsourcing benefits administration
Build or expand benefits website
Internet access for all employees
Common platform for administration
Employee self-service on internet/intranet
Cost shifting to employees
Wider array of voluntary benefits
General financial planning
Pension/retirement plan investment education
Retirement planning
Benefits to help work/life balance 74%
69%
66%
63%
59%
57%
56%
54%
51%
45%
44%
Percentages have been rounded to the nearest whole number.
A key ?nding is that more than half of
Mexican employers mentioned that they
would like to shift the costs of bene?ts to their
employees. Bene?ts providers can work with
employers to ?nd ways to pass on some of the
cost to employees. Education can be a useful
tool for bene?ts providers in this regard.
• As a starting point, providers can focus on
?nancial planning assistance and voluntary
bene?ts. These have the advantages of
providing bene?ts to employees without
the employer taking on large administrative
and cost burdens. Employees in the four
main regions expressed varying degrees
of favorability toward obtaining voluntary
bene?ts and ?nancial planning assistance
through the workplace.
• Employers need to better understand
the role that bene?ts can play in helping
them address their top HR concerns —
maximizing job satisfaction and employee
retention. Employers who offer bene?ts
already see this value, so they merely need
to be reminded, and helped to understand
the return on their investment. Employers
who don’t offer bene?ts don’t necessarily
realize the value bene?ts can bring in
increased job satisfaction. This is another
opportunity for education.
• Retirement, health insurance during
retirement as well as life and disability
insurance are the top line ?nancial
products of interest to Mexican employees.
Demand for these products should increase
as the Mexican economy expands and
grows. Retirement products with tax
bene?ts are also growing in this country.
There is growing interest
among employees of all types
in getting greater access to
bene?ts and products.
2011 STUDY: MEXICO 55
United
Kingdom
Bene?ts at a Glance
The government provides the Basic State Pension
and gives tax incentives for workers to fund their
own personal pensions. In 2012, the government
will introduce a new “personal accounts”
retirement program that will require a mandatory
3% contribution from employers, who must
automatically enroll their employees. Similar to
the trend well under way in the U.S., the U.K. is
moving from a classical pension or de?ned bene?t
system to a de?ned contribution system.
2
The National Health Service provides publicly
funded health care, but private health insurance is
also common.
The insurance and ?nancial products markets are
highly developed and competitive.
Market Pro?le
1
• 6th largest global economy
• GDP of $2.2 trillion: Services (77%);
Industry (22%); Agriculture (1%)
• GDP per capita of $35,100
• Highly developed, wealthy country and world
?nancial center
• Foreign direct investment net in?ows
$25 billion
• Population 62.6 million; labor force of
31.4 million
• Life expectancy at birth 80 years
• Median age 40 years
1
Sources for this section are either The CIA World Fact Book or The World Bank or The IMF. All ?gures are in U.S. dollars.
2
Best’s Insurance News, March 7, 2011
2011 STUDY: UNITED KINGDOM 57
HIGHLY INDUSTRIALIZED AND WEALTHY, THE UNITED
KINGDOM RANKS AS THE THIRD LARGEST ECONOMY
IN EUROPE AFTER GERMANY AND FRANCE AND IN
THE TOP 10 GLOBALLY.
Financially Savvy but
Underestimating the Value
of Employee Bene?ts
in a Changing Economy
UNITED KINGDOM
TOP FINANCIAL CONCERNS OF ALL EMPLOYEES
Appropriate health insurance
Being able to afford quality childcare
Resources and time to care for aging parents or relatives
Enough money so one can stay home with children
Enough money to buy a home
More time to spend with family
Maintaining standard of living
Enough money for children’s education
Enough money to pay bills during sudden income loss
Enough money to make ends meet
Job security
52%
50%
50%
53%
48%
61%
45%
48%
45%
N/A
42%
40%
38%
39%
26%
N/A
26%
36%
23%
N/A
21%
48%
United Kingdom U.S. Percentages have been rounded to the nearest whole number.
3
https://www.cia.gov/library/publications/the-world-factbook/geos/uk.html
4
http://hk.nielsen.com/documents/GlobalConsumerCon?denceReport_Q42010.pdf
The recent global recession hit the U.K.
economy particularly hard, due to the
importance of its ?nancial sector in London,
a global capital of ?nance. Sharply declining
home prices, high consumer debt, and
the global slowdown compounded the
U.K.’s problems, pushing it into recession
in the latter half of 2008 and prompting
the government to implement a number
of measures to stimulate the economy and
stabilize the ?nancial markets. In 2010, with
burgeoning public de?cits and debt levels,
the government initiated a ?ve-year austerity
program to lower budget de?cits.
3
With global stock markets rebounding in
2009 and 2010, there are signs of economic
recovery in the United Kingdom. Recent
consumer con?dence surveys have shown
an increase in con?dence in the U.K., but
the country still lags below the global
average.
4
Moreover, this con?dence is offset
by lingering worries about ?nances and
investments that arose from the ?nancial
crisis, especially among those workers closer
to retirement age.
Not surprisingly, compared to four years ago,
concern about a variety of basic ?nancial
issues has spiked among British workers.
• “Having enough money to pay bills
during sudden income loss” jumped
10 percentage points to 48% of U.K.
employees (compared to 61% for the
2011 STUDY: UNITED KINGDOM 59
Recent consumer con?dence
surveys have shown an
increase in con?dence in the
U.K., but the country still lags
below the global average.
U.S.). Women in the U.K. are even more
concerned: 59%, versus 42% for U.K.
men. “Having enough money to pay for
children’s education” rose 12% points to
45% of workers (48% in the U.S.).
• Even with the uptick in the economy,
concerns over job security also increased
5% from the 2007 study, with 52% of U.K.
employees saying they were “extremely
concerned” with this (compared to half of
American workers); and “having enough
money to make ends meet” rose 6%,
making it of extreme concern to half
of all U.K. workers (a similar number of
Americans, 53%, have this worry).
Despite this escalating ?nancial worry in the
U.K., bene?ts providers still have their work
cut out for them to change attitudes among
both employers and their employees when
it comes to purchasing additional products
to protect income, safeguard retirement or
secure other ?nancial goals like education. But
coming changes in the pension system in the
U.K., increasing longevity, the governmental
austerity program and overall economic
uncertainty could pave the way for greater
interest in a wider variety of bene?ts available
to employees in the workplace.
Brits and
Workplace Bene?ts:
Room for Expansion
and Education
Like their counterparts elsewhere in the
European Union, U.K. employees have broad
health care and some retirement coverage
from national government programs that are
supplemented by generous private pensions
from employers. All of these bene?ts are
currently under scrutiny as government
and employers grapple with ?nancial and
demographic pressures to budgets. In terms
of favorite bene?ts, workers in the U.K. list
paid vacation and holidays (87%) and sick
leave (78%) as the most important bene?ts
received on the job. A ?nancial bene?t —
company pensions — comes in third with 69%.
Britain also has a well-developed ?nancial
services industry that offers access to
numerous sophisticated products ranging
from insurance and pension annuities to
disability and supplemental medical insurance
outside the workplace. For these reasons,
the majority of employees do not recognize
the value of buying additional bene?ts
through their jobs because they buy them
independently on the open market.
For their part, U.K. employers provide a
minimum range of bene?ts, essentially
pensions, life insurance and private medical
(to supplement the national health care
coverage). About half of U.K. employers
offer executive bene?ts to their top echelon
management, with private medical insurance
far and away the most common (68%).
As in the other countries surveyed, the larger
companies tend to offer more bene?ts
in the United Kingdom. But employers
balk at offering more than a few basic
bene?ts — citing the high cost — and do
not see the connection between providing
more bene?ts and attaining their main
HR objectives: attracting and retaining
employees, increasing their job satisfaction
and boosting employee productivity.
Given the higher level of economic uncertainty
that now exists since our ?rst study, this
negative view of providing/acquiring
additional workplace bene?ts could represent
a disconnect for both groups, as well as an
opportunity that bene?ts providers could
capitalize on with education and outreach.
2011 STUDY: UNITED KINGDOM 61
• On the employee side, satisfaction with
bene?ts has increased compared to
2007, with half saying they are satis?ed,
an increase of 5% over the last study.
Moreover, one-?fth of employees are
placing greater value on their bene?ts.
• For their part, employers in the U.K. place
the highest priority on employee retention,
yet consistently underestimate the power
of bene?ts in driving employee satisfaction.
Only 23% of employers think that their
workers are happy with their bene?ts,
compared to 50% of employees. There is
also a disparity in how job satisfaction is
viewed, with only 41% of employers saying
their workers are content versus 53%
of employees feeling good about their
job. Bene?ts communications in the U.K.
could be a factor here, with nearly 75%
on both sides giving a low rating to the
effectiveness of bene?ts communications.
• The popularity of voluntary bene?ts that
we see in the U.S. has not reached the
same level in the United Kingdom. In the
U.S., 52% of U.S. workers said they value
the option to purchase voluntary bene?ts
through their employer; but only one in
?ve U.K. employees who receive workplace
bene?ts expressed a desire for a wider
array of voluntary bene?ts through the
workplace. With enhanced communications
and education around the advantages of
acquiring voluntary bene?ts through the
company, U.K. employees would begin to
see the value of this approach, such as more
choice, better rates and convenience.
5
Undoubtedly, bene?ts can contribute to
loyalty. When employees are satis?ed
with their bene?ts, they have higher job
satisfaction. Similarly, employers who feel
their employees are highly satis?ed with their
bene?ts also believe their company is loyal to
its employees, and their employees are loyal to
the company. As we noted above, companies
need to do a better job understanding the
connection between loyalty and bene?ts
and communicating this to their employees.
Bene?ts providers can play an important role
here in stimulating this dialogue.
5
9th Annual Employee Bene?ts Trends Study, MetLife, 2011
MOST IMPORTANT BENEFITS OBJECTIVES OF ALL EMPLOYERS
85%
84%
78%
79%
76%
82%
69%
66%
68%
87%
50%
69%
46%
52%
45%
61%
37%
56%
United Kingdom U.S.
Helping employees make better financial decisions
Reducing HR administrative costs
Addressing diverse needs of employees
Helping employees make better benefits decisions
Controlling health and welfare benefit costs
Attracting employees
Increasing employee productivity
Increasing employee job satisfaction
Retaining employees
Percentages have been rounded to the nearest whole number.
Financial Security/
Retirement:
Complacency Giving
Way to Concern?
Workers in the U.K. are con?dent about both
their ?nancial future and their abilities to plan
for it. About 75% of them have taken steps
to determine their life insurance needs — the
highest percentage of any country in this
study. Planning for disability, though, is much
lower, with only one-third having done so,
down nine points from 2007. This drop comes
despite the fact that concern about loss of
income from disability or premature death
actually rose three points each since the last
study (to 45%, and 43%, respectively).
Employees in the U.K. have done a good job
to date of planning for retirement, with
two-thirds having taken steps to determine
their income needs in retirement — this
applies consistently to all age groups except
the 21-30 segment, where 37% (still a
relatively solid showing) have done some
retirement planning. U.K. workers plan to retire
around age 63 and expect to live another
20 years. This is in line with their current life
expectancy at birth, about 80 years.
6
• Whereas more than half of U.S. workers
(52%) worry about outliving their
retirement funds, only one-third of workers
in the U.K. have this concern — this is
unchanged from four years ago. Women in
the U.K. worry more (42%) whereas their
male counterparts are more con?dent,
with only 29% worried about running out
of money in their golden years.
• The recent economic crisis, though, is
causing some anxiety in the U.K., especially
among older workers. About a third
of all workers over the age of 51 and
between 41-50 years old said they were
6
https://www.cia.gov/library/publications/the-world-factbook/geos/uk.html
7
Best’s Insurance News, March 7, 2011
2011 STUDY: UNITED KINGDOM 63
“extremely concerned” about rebuilding
their retirement nest egg following the
recent meltdown in world markets. Younger
workers had no such high-level concerns,
given their longer time horizon for savings.
• Compared to four years ago, fewer
workers in the U.K. said they have
achieved or are on track to attaining their
retirement goals. Four percent said they
have achieved their retirement goals, down
1% from 2007 (and compared to 5% of
their American counterparts). Those saying
they were on track dropped nine points to
45%, compared to only one in four U.S.
workers in this category.
Upcoming changes to the government pension
regulations could also spark more concern
among U.K. workers and expose weaknesses in
their retirement planning strategies. Similar to
the trend well under way in the U.S., the U.K.
is moving from a classical pension or de?ned
bene?t system to a de?ned contribution
system.
7
U.K. employees who currently enjoy
a more generous contribution from their
company could lose out in the new regime.
In 2012, the government will introduce a new
“personal accounts” retirement program that
will require a mandatory 3% contribution
from employers, who must automatically
enroll their employees.
But that is not the only or even the
most serious issue. Moving to a de?ned
contribution plan means that the longevity
risk is no longer shouldered by employers
but mostly by employees, who may not
save enough to ensure they do not outlive
their retirement money. Employees also
need to understand that there might be an
income difference between the traditional
de?ned bene?t plan from their employer
and the new de?ned contribution system
that they must actively invest in. This is an
opportunity for bene?ts providers — such as
those offering guaranteed income through
annuities and other products — to offer
workers in the U.K. solutions for gaps in
retirement income. Bene?ts providers and
?nancial companies expect the de?ned
contribution market in the U.K. to boom in
the coming years.
7
NUMBER OF YEARS FULL-TIME EMPLOYEES
PLAN TO SPEND IN RETIREMENT
31+ years
21-30 years
11-20 years
6-10 years
1-5 years 4%
13%
46%
28%
8%
EMPLOYEES TOP FINANCIAL CONCERNS REGARDING RETIREMENT
Having enough money to take care of elderly parents or in-laws
Providing for your own long-term care needs
Rebuilding your retirement savings
following recent financial events
Having to work full-time or part-time
to live comfortably in retirement years
Providing for your spouse’s long-term care needs
Outliving retirement money
34%
52%
33%
N/A
31%
47%
28%
N/A
26%
45%
23%
35%
United Kingdom U.S. Percentages have been rounded to the nearest whole number.
Percentages have been rounded to the nearest whole number.
Financial Planning:
High Degree of Expertise
Raises the Bar
Unlike many of their counterparts in the other
countries in this survey, employees in the U.K.
consider themselves to be ?nancially savvy.
Only one in ?ve admits to being a novice
investor. The fact that workers in the U.K. own
a large number of ?nancial products, most of
these obtained outside the workplace, is proof
of this expertise in personal money matters.
More than half of all of U.K. employees
(51%) feel in control of their ?nances; this is
down seven points from 2007, an apparent
casualty of the recession, but still ahead of
the U.S. at 34%.
Moreover, a full 64% of all workers in the
U.K. consult with ?nancial professionals such
as bankers, insurance agents or certi?ed
?nancial planners. This is up three percent
from 2007, underscoring the desire of
employees in the U.K. to repair the damage
from the ?nancial crisis.
Given the ?nancial expertise of many U.K.
employees, bene?ts specialists will have to devise
innovative strategies to gain their attention and
interest. Employers showed a slight increase
in their willingness to offer general ?nancial
planning services to their employees, though
not for personalized services. But only one in
four workers in the U.K. is even interested in
their employer offering such advice.
Conclusion
The United Kingdom is a wealthy, highly
industrialized country with many of the same
problems confronting its partners in the
European Union as well as the U.S. and Japan.
Namely, the demographic challenge of an aging
workforce, the high cost of social programs
such as retirement pensions and health care,
and the need for austerity in budgeting.
At the same time, the U.K. is a mature
bene?ts market with a working population
that possesses a high degree of sophistication
when it comes to planning for the future and
purchasing products to ensure their ?nancial
BENEFITS OFFERED BY EMPLOYERS WHO PROVIDE BENEFITS
Creditor insurance
Home insurance
Long-term care insurance
Annuities
Dental insurance
Personal accident coverage
Auto insurance
Critical illness insurance
Travel insurance
LTD or permanent health
Life assurance
Private medical (PMI)
Pension 90%
72%
69%
46%
40%
30%
28%
27%
24%
7%
4%
3%
1%
Percentages have been rounded to the nearest whole number.
Bene?ts providers and
?nancial companies expect
the de?ned contribution
market in the U.K. to boom
in the coming years.
2011 STUDY: UNITED KINGDOM 65
security. Culturally, workers in the U.K. are
generally independent, preferring to go
outside the workplace to buy ?nancial services
and products and also seek the expertise of
?nancial planning professionals.
A bene?ts and ?nancial services provider
approaching the U.K. market will need to take
these factors into account to design a strategy
that is geared for the long term.
• There is an Achilles heel in U.K. retirement
planning that can be the basis for a
sophisticated ?nancial discussion. The
majority of U.K. workers are starting to
realize that they might not have suf?cient
funds for their 20+ years in retirement.
Moreover, the coming changes in govern-
ment pension plans and the possibility
that the British have under estimated the
?nancial needs caused by their increasing
longevity could further expose an income
gap that will need to be covered. As
?nancially savvy as they are, U.K. employees
could be in the market for ?nancial
planning and investment information as
they leave the era of company pensions and
enter an era of de?ned contribution plans.
In addition, there could also be growing
interest in the U.K. in guaranteed income
products such as basic or variable annuities.
• Employers seeking to differentiate themselves
and attract the most skilled workers could
broaden their bene?ts offerings to include
more disability insurance as well as private
medical insurance, which is currently a
bene?t reserved for top management. This is
particularly true if companies are cutting back
on their pension plans for retiring workers.
• For the younger working populace in the
U.K., ?nancial education and planning
programs could be of high interest. Offering
them these types of programs could help
employers to achieve their bene?ts goals
of worker retention, higher productivity
and job satisfaction, and at the same time
prepare younger workers for a bigger role
in funding their own retirements.
The second MetLife International Employee
Bene?ts Trends Study was conducted between
November 2010 and February 2011 by GfK
Custom Research, one of the top global market
research consultants. Results were obtained
through face-to-face, telephone and online
interviews. The targeted sample for each country
was designed to appropriately represent the
full-time employee population base. On the
following pages, totals do not always equal
100% due to rounding.
2011 STUDY: METHODOLOGY 67
Methodology
Australia
DEMOGRAPHIC PROFILE OF
THE EMPLOYER SAMPLE:
Interviews were conducted with 258 employers.
Eligible respondents were those dealing with
employee bene?ts or employee policies in companies
with two or more employees.
DEMOGRAPHIC PROFILE OF
THE EMPLOYEE SAMPLE:
A total of 501 interviews were conducted with
full-time employees in companies with two or more
employees.
COMPANY SIZE
2-99 21%
100-999 40%
1,000+ 40%
AGE
21 to 30 11%
31 to 40 27%
41 to 50 33%
51+ 29%
GENDER
Male 43%
Female 57%
INDUSTRY
Heavy Industry 33%
Professional Services 43%
Sales/Trade 20%
Technology/Science 4%
DECISION
Final 10%
A lot of influence 42%
Moderate influence 48%
LOCATION
NSW 41%
Victoria 26%
Queensland 13%
Other locations 20%
COMPANY SIZE
2-99 37%
100-999 27%
1,000+ 37%
AGE
30 or under 32%
31 to 40 28%
41 to 50 22%
51+ 18%
GENDER
Male 54%
Female 46%
EDUCATION
High school or less 21%
Some college 36%
College graduate+ 43%
ANNUAL HOUSEHOLD INCOME
(IN AUSTRALIAN $)
Under $50,000 15%
$50,000-$100,000 48%
More than $100,000 37%
MARITAL STATUS
Married 42%
Single, never married 17%
Domestic partnership 24%
Divorced 7%
Separated 2%
Widowed 1%
CHILDREN
Yes 35%
No 65%
2011 STUDY: METHODOLOGY 69
Brazil
DEMOGRAPHIC PROFILE OF
THE EMPLOYER SAMPLE:
Interviews were conducted with 250 employers
(193 offering bene?ts and 57 not offering bene?ts).
Eligible respondents were those dealing with
employee bene?ts or employee policies in companies
with 50 or more employees.
DEMOGRAPHIC PROFILE OF
THE EMPLOYEE SAMPLE:
A total of 500 interviews were conducted with full-
time employees (351 with bene?ts and 149 without
bene?ts) in companies with 50 or more employees.
COMPANY SIZE
50-99 29%
100-999 56%
1,000+ 15%
AGE
18 to 30 43%
31 to 40 32%
41 to 50 17%
51+ 8%
GENDER
Male 37%
Female 63%
DECISION
Final 7%
A lot of influence 30%
Moderate influence 63%
INDUSTRY
Heavy Industry 23%
Professional Services 47%
Sales/Trade 28%
LOCATION
Sao Paulo 43%
Other locations 57%
COMPANY SIZE
50-99 18%
100-999 44%
1,000+ 38%
AGE
30 or under 44%
31 to 40 27%
41 to 50 17%
51+ 12%
GENDER
Male 57%
Female 43%
LOCATION
Sao Paulo 40%
Other locations 60%
CHILDREN
Yes 44%
No 56%
MARITAL STATUS
Married 58%
Single, never married 34%
Divorced 2%
Separated 3%
Widowed 2%
India
DEMOGRAPHIC PROFILE OF
THE EMPLOYER SAMPLE:
Interviews were conducted with 534 employers
(274 offering bene?ts and 260 not offering bene?ts).
Eligible respondents were those dealing with
employee bene?ts or employee policies in companies
with 100 or more employees.
DEMOGRAPHIC PROFILE OF
THE EMPLOYEE SAMPLE:
A total of 1,090 interviews were conducted with full-time
employees (549 with bene?ts and 541 without bene?ts)
in companies with 100 or more employees.
COMPANY SIZE
100-199 28%
200-499 24%
500-999 20%
1,000+ 28%
DECISION
Final 14%
A lot of influence 28%
Moderate influence 58%
GENDER
Male 90%
Female 10%
INDUSTRY
Services 44%
Heavy Industry 28%
Process Industry 11%
Technology/Science 9%
Sales/Trade 3%
Other 4%
LOCATION
Mumbai 19%
Delhi 21%
Kolkata 14%
Chennai 15%
Bangalore 16%
Ahmedabad 5%
Hyderabad 10%
COMPANY SIZE
100-199 26%
200-499 25%
500-999 20%
1,000+ 29%
AGE
30 or under 32%
31 to 40 35%
41 to 50 23%
51+ 9%
EDUCATION
School up to 5-9 years 4%
SSC/HSC 16%
Some College 6%
Graduate/post graduate (Gen.) 51%
Graduate/post graduate (Prof.) 10%
GENDER
Male 86%
Female 14%
CHILDREN
Yes 54%
No 46%
SAVINGS & INVESTABLE ASSETS
Less than 1 lakh 42%
1 to less than 2.5 lakhs 26%
2.5 to less than 5 lakhs 18%
5 lakhs+ 14%
ANNUAL HOUSEHOLD INCOME (IN RUPEES)
75,000 to less than 1 lakh 23%
1 to less than 2 lakhs 18%
2 to 5 lakhs 12%
6 to 10 lakhs 28%
10 lakhs+ 18%
MARITAL STATUS
Married 72%
Single, never married 28%
LOCATION
Mumbai 26%
Delhi 22%
Kolkata 22%
Chennai 10%
Bangalore 7%
Ahmedabad 5%
Hyderabad 7%
2011 STUDY: METHODOLOGY 71
Mexico
DEMOGRAPHIC PROFILE OF
THE EMPLOYER SAMPLE:
Interviews were conducted with 250 employers
(125 offering bene?ts and 125 not offering bene?ts).
Eligible respondents were those dealing with
employee bene?ts or employee policies in companies
with 50 or more employees.
DEMOGRAPHIC PROFILE OF
THE EMPLOYEE SAMPLE:
A total of 439 interviews were conducted among full-
time employees (223 with bene?ts and 216 without
bene?ts) in companies with 50 or more employees.
COMPANY SIZE
50-99 63%
100-999 26%
1,000+ 10%
AGE
18 to 30 35%
31 to 40 33%
41 to 50 26%
51+ 7%
GENDER
Male 67%
Female 33%
DECISION
Final 28%
A lot of influence 34%
Moderate influence 37%
INDUSTRY
Heavy Industry 36%
Professional Services 25%
Sales/Trade 34%
Technology/Science 6%
LOCATION
Mexico 41%
Guadalajara 20%
Monterrey 20%
Leon 19%
COMPANY SIZE
50-99 39%
100-999 46%
1,000+ 16%
AGE
30 or under 29%
31 to 40 31%
41 to 50 23%
51+ 18%
GENDER
Male 67%
Female 33%
LOCATION
Mexico 35%
Guadalajara 23%
Monterrey 24%
Leon 18%
CHILDREN
Yes 51%
No 49%
MARITAL STATUS
Married 65%
Single, never married 24%
Divorced 5%
Separated 3%
Widowed 3%
SOCIAL CLASS
B, C+ (High) 11%
C (Mid) 40%
D+, D (Low) 49%
United Kingdom
DEMOGRAPHIC PROFILE OF
THE EMPLOYER SAMPLE:
Interviews were conducted with 150 employers
(123 offering bene?ts and 27 not offering bene?ts).
Eligible respondents were those dealing with
employee bene?ts or employee policies in companies
with 10 or more employees.
DEMOGRAPHIC PROFILE OF
THE EMPLOYEE SAMPLE:
A total of 500 interviews were conducted among full-
time employees (317 with bene?ts and 183 without
bene?ts) in companies with 10 or more employees.
INDUSTRY
Heavy Industry 29%
Professional Services 44%
Sales/Trade 20%
Technology/Science 3%
COMPANY SIZE
10-99 55%
100-999 30%
1,000+ 15%
GENDER
Male 41%
Female 59%
DECISION
Final 8%
A lot of influence 48%
Moderate influence 44%
LOCATIONS
North 27%
Midland 19%
South 54%
COMPANY SIZE
10-99 21%
100-999 29%
1,000+ 51%
AGE
30 or under 10%
31 to 40 21%
41 to 50 37%
51+ 32%
ANNUAL HOUSEHOLD INCOME
(IN POUNDS)
£25,000 or less 18%
£25,001-£50,000 50%
£50,001+ 33%
SAVINGS & INVESTABLE ASSETS
Up to £30,000 71%
£30,001+ 30%
GENDER
Male 61%
Female 39%
MARITAL STATUS
Married 65%
Single, never married 15%
Domestic partnership 12%
Divorced 6%
Separated 1%
Widowed 1%
MetLife, Inc. is a leading global provider of
insurance, annuities and employee bene?t programs,
serving 90 million customers in over 60 countries.
Through its subsidiaries and af?liates, MetLife holds
leading market positions in the United States, Japan,
Latin America, Asia Paci?c, Europe and the Middle
East. For more information, visit www.metlife.com.
For additional information, visit us online at:
• Australia: www.metlife.com.au/
• Brazil: www.metlife.com.br/
• India: www.metlife.co.in/
• Mexico: www.metlife.com.mx/
• U.K.: www.metlife.co.uk/
About MetLife
2011 STUDY: METHODOLOGY 73
1900030368
© 2011 METLIFE, INC. L0611187545(exp0812)(All States)
PEANUTS © 2011 Peanuts Worldwide
Metropolitan Life Insurance Company
200 Park Avenue
New York, NY 10166
doc_159896447.pdf
As they plan for expansion either in major global or home markets, multinational companies and local domestic firms would be well-advised to review their employee benefits strategies to ensure that they are aligned with and support the company's business objectives.
2011
International
Employee
Bene?ts Trends
Diverse in form but unique in function, bridges
evoke our ability to create solutions to complex
challenges, to establish enduring connections and
to drive progress toward a better future. Global
employee bene?ts act in a similar supporting
fashion, enabling companies to achieve business
objectives and their workers to meet the needs
of the present while building a secure ?nancial
future for themselves and their families.
MetLife has a proud tradition of investing
in the financial and social well-being of the
communities in which we do business. For
more than 140 years, we have focused on
understanding and serving our customers
through various life stages and economic cycles
through groundbreaking and reliable research.
Moreover, with the acquisition of Alico in
2010, MetLife now has an even larger global
footprint upon which to expand this tradition
of excellence in benefits trends research. We
will continue to serve as a leading voice on
employee benefits by actively influencing public
policy, educating the media and developing
intelligent and useful products.
2011 STUDY: INTRO 1
Introduction
Globalization, along with the ?nancial crisis
of 2008-2009, has put a sharp spotlight on
the changing role and complexity of employee
bene?ts as a tool for companies of all sizes
and industries. Workplace-provided bene?ts —
including retirement, health coverage, disability or
life insurance — often have an important positive
socio-economic impact, especially as governments
begin to seek savings and cut programs in the
face of demographic and budgetary challenges.
report delves into their perceptions on bene?ts
objectives and current practices. Where possible
and relevant, we have compared and contrasted
with the results of the ?rst study. The report
offers actionable conclusions for employers, both
domestic and multinational, which can serve
as guidelines for future bene?ts strategies and
plans. As the global economy returns to a path
of steady growth, the ?ndings of the 2011 report
complement the ?rst study and also aid any
employer with multinational operations planning
to expand internationally.
For more than 140 years, MetLife has been a
leading provider of innovative bene?ts solutions
to companies and their employees. Our ?rst
employee bene?ts trends study was launched in
the U.S. in 2001 and is now in its ninth annual
edition. Moreover, with the acquisition of Alico
in 2010, MetLife now has an even larger global
footprint, with operations and of?ces in more
than 60 countries on six continents. With this
expanded global footprint comes a greater set
of capabilities and a keen understanding of the
world of employee bene?ts, such as the future
of health and wellness programs and retirement
and pension plans for global and local employers.
This second international study is one of many
tools that MetLife provides to employers, brokers,
consultants and other bene?ts professionals.
We invite you to contact your MetLife
representative for a more in-depth discussion
about bene?ts strategies. In the meantime, we
hope you will ?nd the information and analysis
in this second edition of the MetLife International
Employee Bene?ts Trends Study to be of value in
assessing and improving the effectiveness of your
company’s or client’s employee bene?ts plans.
At the same time, the current economic climate is
pressuring the private sector globally to scrutinize
the cost and scope of the bene?ts provided to
workers. There can also be considerable regional
differences in what companies can expect to offer
without jeopardizing their business objectives.
Given the rapidly changing global economy and
role of employee bene?ts, MetLife decided to
expand on its ?rst International Employee Bene?ts
Trends Study, published in 2007.
Our 2011 International Employee Bene?ts Trends
Study includes the four countries from the ?rst
edition — Australia, India, Mexico and the United
Kingdom — plus the addition of a major emerging
market, Brazil. The 2011 report contains the
results of our surveys of employers and employees
from these ?ve countries, which provide a
representative sample of different economic and
workplace environments.
Australia and the United Kingdom are two
mature, industrialized countries that have many
of the demographic trends and challenges of
economically advanced nations. Brazil and India
are two of the high-growth emerging markets,
known along with Russia and China, as BRICs,
which are expected to dominate the world
economy by mid-century. They have similar
economic and demographic characteristics and
challenges, though India’s large population puts
it in a class by itself in many respects. Mexico is
close to both India and Brazil on many issues,
though it has a smaller population and economy
than either of them.
As in the ?rst study, the data in this report
provide insight into the ?nancial concerns,
needs, habits and expectations of employees in
each of these ?ve countries. For employers, the
Contents
Global Overview 4
Australia 16
Brazil 26
India 36
Mexico 46
United Kingdom 56
Methodology 67
2011 STUDY: INTRO 3
Global
Overview
2011 STUDY: OVERVIEW 5
Adapting and Aligning
Employee Bene?ts
to New Global
Economic Realities
GLOBAL OVERVIEW
DESPITE ONGOING UNCERTAINTIES STEMMING FROM
EVENTS IN THE MIDDLE EAST AND JAPAN, THE GLOBAL
ECONOMY IS EXPECTED TO CONTINUE TO CHART A
GROWTH COURSE IN 2011 AND BEYOND.
1
1
Fitch Ratings, Special Report: Global Economic Outlook, 3-31-11
2
Source World Bank and CIA World Fact Book and The IMF
3
http://www.express.co.uk/posts/view/235250/How-Britain-is-stuck-near-the-bottom-of-world-pension-league
GDP POPULATION LIFE EXPECTANCY
AT BIRTH (YEARS)
MEDIAN
AGE (YEARS)
INDIA $1.4 trillion 1.15 billion 66.8 25.0
BRAZIL $2.0 trillion 203 million 73.7 29.0
MEXICO $1.0 trillion 112 million 76.4 27.1
UNITED KINGDOM $2.2 trillion 62.6 million 80.0 40.0
AUSTRALIA $1.2 trillion 21.7 million 81.8 37.7
UNITED STATES $14.1 trillion 307 million 78.0 36.6
DIVERSE ECONOMIES AND DEMOGRAPHICS — DESCENDING ORDER OF POPULATION SIZE
2
As they plan for expansion either in major
global or home markets, multinational
companies and local domestic ?rms would
be well-advised to review their employee
bene?ts strategies to ensure that they are
aligned with and support the company’s
business objectives.
While globalization has had a homogenizing
or ?attening effect in certain areas, such as
the free ?ow of capital or information transfer
with the click of a computer mouse, employee
bene?ts practices can still diverge widely from
country to country. Health care, pensions, life
insurance, and disability are bene?ts that are
often regulated by governments or provided
under state social programs. Government
mandate — or the lack of it — will often
determine both the expectations of employees
and what companies offer.
Retirement bene?ts provide an apt example.
In the two developed economies in this
survey, Australia and the United Kingdom,
the pension plans are quite different. Australia
has its superannuation fund, which is a
government-directed compulsory retirement
savings plan with contributions from
employers and employees. Consequently,
private employers in Australia do not usually
provide a separate de?ned bene?t pension.
In contrast, private companies in the U.K.
have long provided de?ned bene?t pensions
to their employees, with the government
pension amounting to a relatively small sum
compared to other developed countries.
3
The great ?nancial crisis of 2008-
2009 has left a generally high level
of ?nancial concern in its wake
in these countries.
2011 STUDY: OVERVIEW 7
But even government mandates can change,
especially in the light of stark ?scal and
demographic reality.
4
One of the key ?ndings
of our 2011 International Employee Bene?ts
Trends Study is that the great ?nancial
crisis of 2008-2009 has left a generally
high level of ?nancial concern in its wake
in these countries, often accompanied by
a lack of preparation about how to meet
these challenges and return to long-term
?scal health. Staying with the example of
retirement: in the case of Australia and the
U.K., both governments are implementing
changes this year and next year to their
pensions systems, changes that will have a
direct impact on both companies and their
employees. In these countries, the retirement
bene?ts landscape is in ?ux due to budgetary
pressures and populations with some of the
highest life expectancy on the planet.
In our three emerging markets, India, Brazil
and Mexico, there is also a high level of
?nancial anxiety. This concern is coupled,
however, with an even greater lack of
preparedness for both retirement and shorter-
term ?nancial eventualities in countries
whose combined total population is 1.5
billion. Consumer con?dence shows signs of
improvement, however, particularly in
Latin America.
5
Our research results presented in the ?ve
country chapters can help companies devise
solutions to meet these bene?ts challenges
in diverse economies with varying levels of
development. As from the previous study,
multinational companies can extract vital
country-speci?c information and cultural
nuances that can provide the foundation
for local bene?ts strategies. Local domestic
companies will ?nd data which they can use
as benchmarks and input for the formulation
of future bene?ts strategies.
Global Economy,
Local Bene?ts
In its international employee bene?ts research,
MetLife seeks to identify global and regional
trends and benchmark best practices that
enable companies to make informed decisions
that support their goals and strategy.
Employee bene?ts is a strategic investment
in business success regardless of country,
currency or culture. By their very nature, the
principles and ideas in managing bene?ts
entail both “thinking globally and acting
locally.” As in our ?rst study, we identi?ed a
number of challenges confronting companies
that are keen to roll out the right set of
bene?ts for employees in a given market:
• Understanding the impact of the changing
global economy on both employers and
their workers and how this has affected
expectations from our ?rst study.
• Educating employers and HR managers on
the connections between providing bene?ts
and achieving objectives.
• Educating employees on how their bene?ts
serve an important function in their
?nancial safety net, thereby maximizing
the value of the bene?ts offering for all
stakeholders and helping the employer
achieve business objectives.
• Adapting bene?t plans to changing
government mandates, regulatory
requirements and local cultural
circumstances.
• Recognizing regional economic differences,
particularly in larger countries, and
knowing how these are re?ected in
the types of bene?ts offered within the
countries. Our study looked at regional
differences in India and Mexico.
4
http://www.economist.com/node/18502013
5
A Global Nielsen Consumer Report, January 2011, www.nielsen.com
• Aligning global bene?ts packages and
practices — especially those of multinational
companies — to local conditions while
ensuring ?exibility and consistency within
the corporate framework.
Adjusting to and
Acting on New
Economic Realities
The great ?nancial crisis of 2008-2009 acted
like an economic tsunami, lowering the
con?dence of consumers and dashing some
of the employees’ expectations for a wider
array of workplace bene?ts we catalogued in
our 2007 study. While the gradual return to
economic growth worldwide has improved
con?dence levels somewhat, we found that
there are still high levels of ?nancial concern in
these markets. More importantly, this concern
is accompanied by a general inaction on the
part of employers and employees to ?ll the
gaps with either company-paid or voluntary
bene?ts or products bought on the open
market from third parties.
Across the board in all ?ve countries, having
enough money either to cover a sudden loss
in income or just to make ends meet ranks in
the top three of employee ?nancial concerns.
Underscoring the potential fragility of the
recovery, employees in the U.K., Australia and
2011 STUDY: OVERVIEW 9
Mexico cite job security as either their ?rst or
second concern regarding ?nancial security.
Employees in the major emerging markets of
India and Brazil, two of the fastest growing
economies worldwide, are more con?dent
about their job security.
Even in the U.K., which has the highest level
of ownership of ?nancial products among
the surveyed countries, two-thirds of the
employees surveyed had not taken any
steps to determine their disability insurance
needs. Yet, anxiety about sudden income
loss is on the rise there. The trends are similar
in the other mature market, Australia, where
employees generally own few ?nancial
products outside of those purchased in
the workplace.
In Brazil and Mexico, which have large
populations of young people, employees cite
having enough money for education as a top
three concern.
The Potential of
Voluntary Bene?ts
Employers in all ?ve countries are looking for
ways to lower the costs of the bene?ts they
provide and have their employees share some
of the burden. Employers who do not offer
bene?ts cite cost as the main reason, though
not always. In India, 30% of employers who
#1 #2 #3
AUSTRALIA Income protection Travel accident Total permanent disability
BRAZIL Term life insurance Health insurance Dental insurance
INDIA Health insurance Critical illness insurance Pension
MEXICO Life insurance Savings fund Health insurance
UNITED KINGDOM Pension Private medical Life insurance
TOP BENEFITS CURRENTLY OFFERED
do not offer bene?ts said it was a matter of
planning, suggesting a basic lack of awareness
of the connection between offering products
and achieving their top goal of increasing
employee productivity.
As in the United States, there is a growing
interest among employees in employee-paid
voluntary bene?ts offered at work.
Using the U.S. as a benchmark, nearly two-
thirds (61%) of American employees say they
value voluntary bene?ts as a way to meet their
personal needs; and 52% said they are ready
to choose a wider array of voluntary bene?ts
that they pay for themselves. But there is a
disconnect in the U.S. between employees and
their companies on this topic: more than one
in four companies (43%) said they believed
their employees were not interested in a wider
range of voluntary bene?ts and only 14% said
they were likely to increase the amount of
these bene?ts to choose from.
6
In some of the countries in our international
survey, we found similar but not always
identical trends concerning voluntary bene?ts:
• In Brazil, for example, nearly one-third of
women not currently receiving bene?ts
said that they were interested in purchasing
products such as personal accident and
private pension through their employers but
paying 100% of the costs themselves. This
is signi?cant because women are a growing
component of the Brazilian workforce
with their per capita income growing
7.3% from 2000 to 2006 (compared to
Across the board in all ?ve
countries, having enough money
either to cover a sudden loss in
income or just to make ends meet
ranks in the top three of employee
?nancial concerns.
2011 STUDY: OVERVIEW 11
of Mexican employers said they saw value
and advantages in offering workers a
broader choice of voluntary bene?ts.
In general, our study found that offering
bene?ts on a voluntary basis is a cost-effective
way for employers to help employees obtain
the right amount of ?nancial protection for
their needs.
Retirement:
Aging Populations,
Underfunded Accounts
Economic development and industrialization
contribute not only to rising standards of living,
but also to greater longevity. Worldwide,
people are living longer. In the ?ve very diverse
countries surveyed, life expectancy ranges
from about 67 years in India to about 82 years
in Australia. The trend is moving in an upward
direction, toward longer lives and extended
retirement. In the United States, people who
reach age 65 today can expect to live almost
another 20 years.
7
In Japan, a woman born
today has about a 50% chance of becoming
a centenarian.
8
2.6% for men). Nearly half of all Brazilian
employees who currently receive workplace
bene?ts said they are interested in a wider
array of voluntary bene?ts. A majority of
Brazilian employers said they saw value and
advantages in offering workers a broader
choice of voluntary bene?ts.
• In Australia, the majority of employers
are not convinced that offering voluntary
bene?ts should be part of their strategy,
but one in ?ve employees said they would
be interested in purchasing products such
as income protection. Financial planning
services could be one of these voluntary
bene?ts as only 36% of Australian male
employees and 24% of female employees
said they were con?dent in making ?nancial
decisions. Given the looming labor shortage
Down Under, Australian employers might
want to consider this option.
• In Mexico, 56% of workers who currently
have workplace bene?ts said they wanted
a wider choice of voluntary bene?ts.
About one in four Mexican employees
who currently do not receive bene?ts said
they would pay the full cost to get life,
disability and health insurance as well as a
savings fund via the workplace. A majority
6
9th Annual Employee Bene?ts Trends Study, MetLife, 2011, pps. 26-27
7
http://www.economist.com/node/18502013
8
World Bank and CIA World Fact Book
TOP THREE FINANCIAL CONCERNS AND WORK/LIFE GOALS OF EMPLOYEES
#1 #2 #3
AUSTRALIA Enough money to pay bills
during sudden income loss
Job security Enough money
to make ends meet
BRAZIL Enough money for
children’s education
Enough money to pay bills
during sudden income loss
More time to spend
with family
INDIA Enough money
to make ends meet
Appropriate health
insurance
Resources and time to care
for aging parents and relatives
MEXICO Enough money to pay bills
during sudden income loss
Job security Enough money for
children’s education
UNITED KINGDOM Job security Enough money
to make ends meet
Enough money to pay bills
during sudden income loss
Workers in the ?ve countries surveyed are
certainly aware that they are living longer.
Most workers are also planning to retire in
their early 60s, or even earlier in the case
of Mexico. The result is that people are
anticipating longer retirements than ever
before. But this good news creates its own
pressures. In our study, “outliving retirement
money” is viewed as a major concern for all
countries except India. But even in India, the
number one retirement concern is having
enough money to afford health care, while
another top worry is having to work in
retirement to live comfortably.
Yet, this awareness that the retirement nest
egg might not last one’s entire golden years
is for the most part not translating into
increased savings and planning among the
groups surveyed. This is particularly true in
our three emerging markets. In India, a full
85% of those surveyed had not taken any
steps to plan for retirement. About three-
quarters of all Mexican workers had not taken
any steps to plan for retirement or determine
what their income needs will be when they
stop working; about two-thirds of all Brazilian
workers are not prepared for retirement.
In Australia, with its higher per capita income
and mandatory pension system, about three-
quarters of all workers say they are behind in
reaching their ?nancial goals for retirement.
And only one in four has done any planning
beyond that needed for their superannuation
fund. Even in the U.K., about one-third of older
workers approaching retirement are worried
about how to replenish savings that were
depleted by the recent stock market crash.
Governments as well as private employers
worldwide are assessing their retirement
systems and pension plans in light of these
demographic realities. More people living
longer means the overall public burden of
retirement will skyrocket, and it has begun
to do so, including in the United States.
9
A key ?nding on retirement from our research
is that most employees cannot rely solely
on govern ment pensions and employer-
sponsored plans to have enough money to
#1 #2 #3
AUSTRALIA Outliving
retirement money
Being able to afford
health care in
retirement years
Having to work full-time or
part-time to live comfortably
in retirement years
BRAZIL Being able to afford
health care in
retirement years
Outliving
retirement money
Having enough money
to take care of elderly
parents or in-laws
INDIA Being able to afford
health care in
retirement years
Having to work full-time or
part-time to live comfortably
in retirement years
Providing for your own
long-term care needs
MEXICO Being able to afford
health care in
retirement years
Having to work full-time or
part-time to live comfortably
in retirement years
Outliving
retirement money
UNITED KINGDOM Outliving
retirement money
Providing for your
spouse/partner’s
long-term care needs
Having to work full-time or
part-time to live comfortably
in retirement years
TOP CONCERNS OF EMPLOYEES REGARDING RETIREMENT
9
http://www.economist.com/node/18502013
live on for 20 or more years after they stop
working. Employees will need to contribute
more to their retire ment savings. Employers,
for their part, should also be more open
to offering more ?exible types of bene?ts,
including ?nancial planning services for their
workers. In the end, having the right amount
of information and ?nancial education — and
the tools to act on this information — will
bene?t workers, their companies and society.
Common Challenges
for Both Sides
The 2011 MetLife Study of International
Employee Bene?ts Trends found a number
of common concerns among employers
and workers that apply to all of the countries
in our survey, regardless of size and level
of development. Our report also revealed
some distinct differences, including among
the regions of India and Mexico.
Common challenges confronting both
multinational companies and their in-country
counterparts are:
• Increasing the productivity of their workers:
All ?ve countries have this as one of their
top three bene?ts objectives. It is the
primary concern in India and Mexico,
and ranks second for Brazil. As the global
economy continues to grow this year and
competition for customers rises, companies
will need to re?ne their bene?ts strategies
to get more out of their workers.
• Retaining employees: This is the number
one priority for the two developed
economies in our study. This could present
a challenge in Australia and Brazil, which
face labor shortages. For example, in
Brazil, employees express greater loyalty
to employers who provide bene?ts, while
in Australia there is a disconnect between
companies and workers, with the former
overestimating the loyalty of the latter.
Companies in all ?ve countries should
also review their bene?ts policies to make
sure there is no disconnect between
what they offer and what their workers
seek — we saw this in a number of cases
in our research.
• Controlling health and welfare bene?t
costs: This is a top concern for the three
emerging markets in our study, which
also have the largest working populations.
As living standards rise in Brazil, India and
Mexico, workers will look to employers
to offer more bene?ts. The continued
acceleration of health care costs worldwide
presents a challenge that will require
creative, long-term solutions involving both
the public and private sectors.
• Improving ?nancial planning skills of
employees: Many employees do not take
the time to do ?nancial planning or needs
assessments and are therefore unaware
of the options available to them. Preparing
for challenges such as income loss or
disability requires skills that employees in
all countries could use.
• Confronting the retirement issue head on:
Pensions are costing more and people
are living longer, while government funds
face shortfalls. Retirement is an issue
that should bring employers and workers
together for an honest discussion about
contributions, expectations and solutions.
Retirement and health care are the bene?ts
issues of the 21st Century.
One ?nal point to bear in mind is that
achieving multiple bene?ts objectives involves
a ?ne balancing act for employers. Focusing
on cost control only, for example, may come at
the expense of achieving employee productivity
or employee retention. Employers need to take
a more holistic view of their offerings.
2011 STUDY: OVERVIEW 13
Conclusion and
Next Steps
The above challenges and concerns merely
scratch the surface of the global bene?ts
landscape. What can employers do to move
the ball forward given the results of our study?
Connecting the dots: Employers across
the board need to better understand the
value that bene?ts can offer in helping
them address their top HR concerns in this
changing global economy. This can be true
for employers who already offer bene?ts
as well as those who are considering doing
so for the ?rst time. Starting two-way
dialogue with employees, through the HR
and corporate communication channels,
can jump start this process and lead it
to success.
Education: In bene?t planning, the ?rst step is
education. Many employees in the countries
surveyed are either unaware of the products
and options available to them or lack the
knowledge and con?dence to research their
insurance and savings needs. Employers can
stress the value of workplace bene?ts to
employees, such as cost advantages, safety,
simplicity and convenience of voluntary
bene?ts. Employers can also get more
engaged in ?nancial planning assistance and
discuss the introduction of ?exible bene?ts
that help employees achieve a better
work/life balance.
Expanding to include voluntary bene?ts:
Bene?ts providers could show employers
how voluntary bene?ts will not add to their
costs but still enable them to offer more
bene?ts to employees. Employers seeking to
differentiate themselves and attract the most
skilled workers could broaden their bene?ts
offerings to include more voluntary bene?ts,
such as disability insurance, life insurance
or dental.
Women in the workforce: Our study
showed that women in our survey countries,
including the mature economies, often have
greater ?nancial concerns than men and
are interested in bene?ts such as ?nancial
planning. Many women seek ?nancial
independence as part of their career goals.
Both domestic companies and foreign multi-
nationals would do well to pay attention
to the goals of their women employees.
Bene?ts providers have an opportunity to
educate the female employee population on
?nancial planning to help ensure a secure
?nancial future.
#1 #2 #3
AUSTRALIA Retaining employees Increasing employee
job satisfaction
Increasing employee
productivity
BRAZIL Increasing employee
job satisfaction
Increasing employee
productivity
Controlling health and
welfare benefit costs
INDIA Increasing employee
productivity
Controlling health and
welfare benefit costs
Helping employees make
better financial decisions
MEXICO Increasing employee
productivity
Increasing employee
job satisfaction
Controlling health and
welfare benefit costs
UNITED KINGDOM Retaining employees Increasing employee
job satisfaction
Increasing employee
productivity
TOP BENEFITS OBJECTIVES OF EMPLOYERS
2011 STUDY: SECTION 15
Workers in the ?ve countries
surveyed are certainly aware
that they are living longer.
Most workers are also
planning to retire in their early
60s, or even earlier in the
case of Mexico. The result is
that people are anticipating
longer retirements than ever
before. But this good news
creates its own pressures.
2011 STUDY: OVERVIEW 15
Australia
1
Sources for this section are either The CIA World Fact Book or The World Bank or The IMF. All ?gures are in U.S. dollars.
Market Pro?le
1
• 13th largest global economy
• GDP of $1.2 trillion: Services (71%);
Industry (25%); Agriculture (4%)
• GDP per capita of $41,300
• Developed, industrialized country with
market-based economy
• Australia is the largest and fastest-
growing market in the Asia-Paci?c
region for retirement income products
• Foreign direct investment net in?ows
of $22.5 billion
• Population 21.7 million;
labor force of 11.6 million
• Life expectancy at birth 81.8 years
• Median age 37.7 years
to 12% over the coming years; that increase is still
awaiting approval by the Australian Parliament.
All superannuation funds have an investment
component, and the government is also
making it easier for employees to choose the
superannuation fund in which they want to put
their money.
Any discussion of employee bene?ts in Australia
must consider how non-medical based insurance
coverage is delivered. Most superannuation
funds also have, either on a voluntary or
mandatory basis, an insurance component for
products including term life, disability and income
protection. While American-style, employer-
sponsored corporate or group insurance is
available in the Australian market, most employees
obtain their insurance coverage through the
superannuation relationship. Such coverage
is contracted between the trustees of the
superannuation fund and local insurance providers.
While many employers choose a particular super-
annuation fund in which they fund employees’
superannuation contributions, employees
can choose to have their dollars directed to a
superannuation fund of their choice. It is common
for employees to have dollars invested in multiple
supernannuation funds, although consolidation
is being emphasized.
Employees may purchase additional insurance
bene?ts if offered, and costs are deducted from
their investment account.
There is government-provided national health
insurance but private supplemental health
insurance is available and frequently obtained.
Bene?ts at a Glance
Australia has a government-regulated,
mandatory retirement savings program called
“superannuation,” a system that requires
employers to contribute a percentage of workers’
annual base salary to a fund of the employees’
choice. Recognizing that Australians are not
saving enough for retirement, the government
has proposed to increase the amount from 9%
2011 STUDY: AUSTRALIA 17
EMPLOYEES WHO BELIEVE THEY WILL OUTLIVE THEIR RETIREMENT MONEY
IN THE WAKE OF THE GREAT FINANCIAL CRISIS,
OUR STUDY FOUND AUSTRALIANS EXPRESSING
CONCERN ABOUT HOW TO ADDRESS THEIR
OVERALL FINANCIAL NEEDS — BOTH NOW AND
FOR THE FUTURE.
Financial Concerns Loom
Over Retirement Savings,
Low Product Ownership and
Potential Labor Shortage
AUSTRALIA
51+ year olds
41-50 year olds
31-40 year olds
18-30 year olds
All employees 39%
28%
37%
46%
51%
Percentages have been rounded to the nearest whole number.
The bright side is that the global ?nancial crisis
left the island continent relatively unscathed.
A rapid response from the government in
the form of a $50 billion stimulus package
and the cutting of interest rates to historic
lows helped the economy rebound after
just one quarter of contraction. Strong
demand for natural resources — especially
from China — also put the wind back into
Australia’s economic sails.
2
Global consumer
con?dence surveys ?nd Australians among the
most con?dent in the world when it comes to
believing that their economic lot will improve
in the next 12 months.
3
However, despite this optimism and relative
resilience of the Australian economy, many
Australians said they suffered a variety of
economic troubles, including job distress,
dif?culty in paying bills and debt, or housing
problems. In fact, “Having enough money to
pay the bills during sudden income loss” tops
the list of ?nancial concerns for Australians
today, while four years ago this worry had
second place. Concerns about job security
rose in urgency from the last survey, moving
from third to second place among Australians’
top ?nancial concerns.
Given this dichotomy between optimism
and concern, or perhaps because of it, the
majority of Australians have not taken steps
to address their ?nancial security concerns,
and ownership of ?nancial protection
products beyond simple life insurance and
2011 STUDY: AUSTRALIA 19
2
https://www.cia.gov/library/publications/the-world-factbook/geos/as.html
3
http://in.reuters.com/article/2011/01/23/idINIndia-54344020110123
The majority of Australians have
not taken steps to address their
?nancial security concerns, and
ownership of ?nancial protection
products is quite low.
some income protection coverage is quite
low. Contributing to this low ownership
rate is the fact that few products are owned
through the workplace, primarily because
most superannuation funds and employers
do not offer such bene?ts, including those
to supplement retirement savings.
• Only 41% of those surveyed have taken
steps to determine their household’s level
of income protection needs, even though
almost two-thirds of those surveyed aged
41-50 cited a disabled principal wage
earner as their highest ?nancial worry.
• Fewer than half have researched their
household’s life insurance needs, although
47% of those surveyed with children list
premature death as a top ?nancial concern.
• Australians own an average of only one
?nancial product through the workplace,
and ownership of life insurance, income
protection and total permanent disability
is low. Those over age 30 own more
products (an average of ?ve) obtained
outside the workplace.
“ Having enough money to
pay the bills during sudden
income loss” tops the
list of ?nancial concerns
for Australians today.
Job security moved from
third to second place.
EMPLOYEES WHO HAVE DONE ANY
PLANNING FOR RETIREMENT
61%
39%
No
Yes
Percentages have been rounded to the nearest whole number.
2011 STUDY: AUSTRALIA 21
Retirement Down
Under: Longer Lives
Mean Greater Need for
Income Supplements
Retirement is clearly the Australians’ biggest
long-term ?nancial concern. With average life
expectancy well into the their 80’s, Australians
are justi?ably concerned about outliving their
retirement income.
Australia established its current superannuation
fund system in 1992 to help ?nance
employees’ retirement in light of demographic
trends showing an aging population outliving
its means to support itself. The program has
since had internationally recognized success,
with approximately $1.3 trillion in assets
today — giving the Australian worker more
money invested in managed funds per capita
than workers in any other country.
4
Employers must contribute 9% of employees
earnings base to the fund; there is a
governmental proposal currently under
review which will increase this contribution,
if approved, to 12%. The government is also
now making it easier for employees to choose
the superannuation fund in which they want
to invest their money. But only 12% of all
employers match the employee contribution
to the superannuation fund.
Despite this success and investment,
projections show that more than half of
all Australians will outlive their retirement
savings.
5
Australians are increasingly aware
of this, as our 2011 study shows. A majority
of Australian workers say they plan to retire
at 60, and thus they will need money to
live on well into their 80s. It should come
as no surprise then that their top retirement
concern is “outliving retirement money.”
Yet, only four in 10 are taking any steps to
supplement their projected retirement needs.
About three-fourths of Australians believe they
are not accumulating enough wealth and are
behind in reaching their retirement ?nancial
goals; and the concern about outliving their
funds grows the closer the employee is to
retirement, with 52% of Australians over the
age of 51 years saying they are extremely
concerned about outspending their savings —
this is up from 49% in the previous study.
As Australians decide where to deposit
their superannuation contributions, both
superannuation funds and employers have an
opportunity to provide access to information
that will help them make decisions on their
future savings choices.
4
http://www.mpfexpress.com/Downloads/Articles/2011/03/28/mpfx-voice-
providers-Q07.pdf
5
http://www.vrl-?nancial-news.com/wealth-management/life-insurance-intl/
issues/lii-2011/lii-256/big-?aws-in-australia%E2%80%99s-super.aspx
Don’t have goals
Haven’t started
Significantly behind
Somewhat behind
On track for reaching goals
Already achieved goals 2%
22%
23%
18%
19%
16%
EMPLOYEES’ PERCEPTIONS ABOUT ACHIEVING THEIR RETIREMENT GOALS
Percentages have been rounded to the nearest whole number.
A look at the average superannuation fund
balance shows the root of this concern.
Even among those approaching retirement,
those over 50 years, the average account
total is $52,500.
Employees have the opportunity to
supplement their superannuation fund
through additional contributions. But only
25% of Australian employees contribute more
than the mandatory 9% and only 20% opt
to have a lower salary in exchange for higher
contributions to the superannuation fund
(known as salary sacri?cing). This could re?ect
cash-?ow dif?culties but it could also be an
issue of education and understanding of the
need to save more.
Even though a wide majority of employees
(76%) and a majority of employers
(52%) said they were satis?ed with their
superannuation fund provider, few express
interest in purchasing additional ?nancial
products and services through their fund.
This could stem from a lack of awareness
of what is available. Only about a third of
employers use a broker or consultant for
employee bene?ts. Employers that use a
broker or consultant do so because they need
administration assistance, pricing information
and help in both identifying a short list of
carriers and in recommending new bene?ts.
Financial stability and service, including
being easy to do business with, are the
overwhelmingly top criteria for selecting
a bene?ts carrier in Australia.
Projections show that more
than half of all Australians will
outlive their retirement savings.
Yet, only four in 10 are taking
any steps to supplement their
projected retirement needs.
Helping employees make better financial decisions
Helping employees make better benefits decisions
Reducing HR administrative costs
Addressing diverse needs of employees
Attracting employees
Increasing employee productivity
Increasing employee job satisfaction
Retaining employees
90%
84%
86%
79%
84%
82%
84%
66%
57%
52%
56%
61%
49%
69%
43%
56%
Australia U.S.
MOST IMPORTANT BENEFITS OBJECTIVES OF ALL EMPLOYERS
Percentages have been rounded to the nearest whole number.
2011 STUDY: AUSTRALIA 23
Workplace: Looming
Labor Crunch Puts
Spotlight on Bene?ts
Employers believe that Australia can expect
a labor shortage within the next two years
and that competition for workers could spike.
While 40% expect a shortage of labor, about
two-thirds of employers think that they will
have dif?culty in attracting employees in the
next 18 months. This sentiment increases
with the size of the company, with fully 75%
of those companies with more than 1,000
employees anticipating a hiring shortage.
While economic growth will drive some of
this shortage as employers add jobs, more
than two-thirds of employers surveyed believe
that the aging workforce will also have an
impact on the Australian labor market. For this
reason, 90% of employers listed employee
retention as their top bene?ts objective.
Increasing employee job satisfaction and
boosting employee productivity rank as the
second and third objectives, respectively.
But there are a variety of disconnects on
both sides about the value of bene?ts in the
workplace. About two-thirds of employers
are not aware of the role bene?ts can play
in achieving their objectives and of the value
they bring to employees. Similarly, only a
third of those surveyed see the value in
offering a wider array of voluntary bene?ts
to employees. Helping employees make
better bene?ts decisions and improving their
?nancial choices are also ranked very low
by employers.
There is a link between bene?ts
and loyalty. Of those employees
with bene?ts surveyed, 57% had
high job satisfaction.
The most important bene?ts for Australian
employees are in the non-insurance area.
Speci?cally, they place high value on ?exible
working hours, training, and employer
contributions over and above the required 9%
to their superannuation fund.
For their part, only one in ?ve employees
said they are satis?ed with their bene?ts.
And nearly all Australian employees say that
bene?ts are not what attracted them to an
employer or what keeps them there.
There is, however, a link between bene?ts
and loyalty. Of those employees with bene?ts
surveyed, 57% had high job satisfaction.
Similarly, employers who feel their employees
are highly satis?ed with their bene?ts also
believe their company is loyal to its employees,
and that their employees are loyal to
the company.
Workplace Financial
Planning: Potential
Interest, Growing Need
Although having enough to retire on is a big
worry for Australians, it is not the only one.
About one-quarter of all employees either live
paycheck to paycheck or have some dif?culty
paying bills. Almost all have some form of
debt, although more than a third have no
debt beyond a car loan or home mortgage.
While about one-third of Australian
employees express con?dence in their ?nancial
management skills, another third express
doubt that they can make the right decision
on ?nancial matters. A third of employees
consider themselves to be a “beginner
investor,” which rises to 42% for those
under the age of 30. Moreover, only 40%
of all Australian employees use a ?nancial
professional — banker, planner or insurance
agent — although this ?gure increases to
about half for those closer to retirement.
Resources and time to care for aging parents or relatives
Appropriate health insurance
Being able to afford quality childcare
Enough money for children’s education
More time to spend with family
Enough money so one can stay home with children
Enough money to buy a home
Enough money to make ends meet
Job security
Enough money to pay bills during sudden income loss
52%
61%
46%
50%
45%
53%
40%
39%
40%
N/A
35%
40%
31%
48%
30%
N/A
27%
48%
21%
36%
Australia U.S.
TOP FINANCIAL CONCERNS OF ALL EMPLOYEES
Percentages have been rounded to the nearest whole number.
2011 STUDY: AUSTRALIA 25
The good news is that there is interest
among employers and employees about
using the services of ?nancial professionals.
More than half of employers said they are
willing to aid employees by offering ?nancial
planning services, including the provision
of personalized advice. This is particularly
true of companies with more than 1,000
employees, a large majority of which also
support employees discussing bene?ts
and ?nancial issues outside the workplace
with professionals.
Conclusion
Australia’s economic engine is humming again
and the island continent’s working population
is con?dent that their ?nancial lot will improve
in the coming years. The country’s excellent
retirement system — the superannuation
fund — has laid the foundation for basic
coverage for the retirement of its workers. But
scratch beneath the surface of this optimism,
and there is a thick layer of worry among
Australian workers of all age groups about
their short- and long-term ?nancial wellness.
Many worry about covering current expenses
and the majority are not saving enough for
retirement. While this concern has yet to
translate into action for most, this presents a
major opportunity for all sides to consider the
expansion of employer-provided bene?ts and
other programs as the primary remedy on the
road to ?nancial security.
Australian companies, moreover, are facing
a potential labor shortage in the coming
two years. This challenge also presents an
opportunity for companies to augment the
bene?ts they provide in order to boost both
employee attraction and retention.
• In bene?t planning, the ?rst step is
education. A majority of employees are
either unaware of the products and
options available to them or lack the
knowledge and con?dence to research
their insurance and savings needs.
Employers and superannuation funds can
stress the value of workplace bene?ts to
employees, such as cost advantages, safety,
simplicity and convenience of voluntary
bene?ts. Employers and the funds can also
get more engaged in ?nancial planning
assistance and discuss the introduction
of ?exible bene?ts that help employees
achieve a better work/life balance.
• To attract and retain workers in the coming
tight labor market, employers that have
employees as customers can explore
both augmented retirement and ?nancial
planning options. Employees need to
understand that their superannuation fund
contributions should be both augmented
and supplemented by other investment
vehicles. There is a real opportunity
to explore more products from the
superannuation fund providers and other
?nancial services ?rms.
• With the economy picking up and the
labor market heating up, Australian
employers have a real opportunity to
explore innovation in bene?ts packages,
including retirement, ?exible and voluntary
bene?ts. Australian workers are still under-
insured and need more options to buy life
insurance, income protection and disability
coverage at the workplace. Innovative
ways to save for retire ment should also
be of great interest to company bene?ts
executives and workers alike.
In bene?t planning, the ?rst
step is education. A majority of
employees are either unaware of
the products and options available
to them or lack the knowledge
and con?dence to research their
insurance and savings needs.
Brazil
Bene?ts at a Glance
4
Government pension is available for men after 35
years’ contribution and for women after 30 years. It
is also possible to apply for the pension bene?t by
age — the pension is available for men older than
65 and for women older than 60. Rural workers
can apply for the bene?t ?ve years earlier. They
must have contributed for at least 180 months. It is
?nanced through mandatory payroll taxes, shared
by the employer and the employee, revenues
from sales taxes and federal transfers that cover
shortfalls of the system. This federal system also
covers survivor and disability pensions. For people
who do not meet the contribution and age criteria,
the government applies an adjustment factor to
arrive at a pension amount. The maximum value
for the pension is R$ 3689.66 (US$: 2,341.16), but
this amount changes according to some conditions,
including amount of contribution during the
employee life, the amount of time contributed and
age at retirement.
As in other countries, private sector employees
would not be able to meet their ?nancial needs in
an extended retirement with just the state pension.
But workers in the public sector are in a different
situation in Brazil. When they retire, they receive
their full salary.
Health care in Brazil is provided by both private and
government institutions. Primary health care remains
the responsibility of the federal government; some
elements of the system, such as the operation of
hospitals, are overseen by individual states. Public
health care is provided to all Brazilian permanent
residents and is free at the point of need (being
paid for from general taxation
5
).
Market Pro?le
1
• 8th largest global economy
2
• GDP of nearly $2.02 trillion: Services (68%);
Industry (26%); Agriculture (6%)
• GDP per capita of $10,900
• Brazil is a fast-growing, free-market-based
emerging economy with large and well-
developed agricultural, mining, manufacturing,
and service sectors; commodity-driven exports
are leading a strong recovery, with China
becoming a major trading partner
• Net in?ows of foreign direct investment:
$48 billion
• Population: 203 million; formal and
informal labor force 92.7 million
3
• Life expectancy at birth: 73.7 years
• Median age: 29 years
1
Sources for this section are either The CIA World Fact Book or
The World Bank or The IMF. All ?gures are in U.S. dollars.
2
(The Economist placed it 7th, ahead of Italy, in 2011)
3
IBGE Census, 2010
4
International Bene?ts Network and the OECD.
5
http://en.wikipedia.org/wiki/Health_in_Brazil
2011 STUDY: BRAZIL 27
BRAZIL, INCLUDED FOR THE FIRST TIME IN OUR
STUDY, IS A RAPIDLY GROWING, DEMOCRATIC
EMERGING MARKET THAT HAS BOTH THE LARGEST
ECONOMY AND POPULATION IN LATIN AMERICA.
Largest Economy in Latin
America Is a Global Success
Story but Workers Are Anxious
About Financial Future
BRAZIL
TOP FINANCIAL CONCERNS OF ALL EMPLOYEES
Being able to afford quality childcare
Enough money so one can stay home with children
Resources and time to care for aging parents or relatives
Enough money to buy a home
Job security
Appropriate health insurance
Enough money to make ends meet
More time to spend with family
Enough money to pay bills during sudden income loss
Enough money for children’s education
68%
48%
67%
61%
65%
40%
65%
53%
62%
48%
60%
50%
60%
39%
57%
36%
47%
N/A
45%
N/A
Brazil U.S.
Percentages have been rounded to the nearest whole number.
It is one of the so-called BRIC countries
that, along with Russia, India and China, are
predicted to dominate the world economy
by mid-century. Current trends seem to bear
out this prediction.
Brazil has abundant natural resources and
strong industrial development potential. With
strong economic growth, Brazil is closing what
was once a wide gap between the rich and
poor.
6
Economic reforms started in 1994 under
the President Itamar Franco government, and
continued by his successor Fernando Henrique
Cardoso, stabilized the Brazilian economy and
strengthened the currency, the real. In 2002,
then President Luiz Inácio Lula da Silva
continued and expanded this path of reform
that has transformed the Brazilian economy.
Despite an increasing standard of living,
however, much of the population still ?nds it
dif?cult to save for the future and must work
longer to maintain quality of life.
The world ?nancial crisis of 2008-2009
did not spare Brazil, which suffered two
quarters of recession as the demand for
commodities dropped by large margins.
But Brazil, thanks to both sound economic
policies and its importance as a world market,
has recovered quickly. Its economy grew
about 7.5% in 2010.
6
This strong turnaround
2011 STUDY: BRAZIL 29
Brazil’s economy grew about
7.5% in 2010.
6
This strong
turnaround and Brazil’s accelerating
growth as a major emerging
market are re?ected in a high
level of consumer con?dence —
the highest in Latin America at
the end of 2010.
7
6
CIA Factbook
7
A Global Nielsen Consumer Report, January 2011, p. 7. www.nielson.com
and Brazil’s accelerating growth as a major
emerging market are re?ected in a high level
of consumer con?dence — the highest in
Latin America at the end of 2010.
7
Our study
found that seven in 10 Brazilian employees
said their ?nancial situation would improve in
six months.
Despite this optimism, our ?ndings show that
the average Brazilian worker also has serious
?nancial concerns. Brazilians are plagued
by high levels of debt and worry about an
inability to pay monthly bills. Our 2011 study
found the following:
• Topping the list of ?nancial concerns for
Brazilians is “having enough money to pay
for their children’s education,” with 68%
saying they are “extremely concerned.”
The second top concern, for 67% of those
surveyed, is “having enough money to pay
bills during sudden income loss” (this is the
number one concern of Americans). Finally,
65% of Brazilians fear not having enough
money to make ends meet, which is tied as
the third top concern with having enough
time for family.
• Brazilians also rate as a number one
concern the impact of a death or illness
on their family’s ?nancial security, with
71% “extremely concerned” about this
possibility (this ranks third for Americans);
and 68% of Brazilians fear their ?nancial
security will be affected because of medical
bills not covered by health insurance (this is
a top concern for American workers).
• Despite this high level of concern, less than
half have taken steps to determine their
life insurance needs. Men tend to do more
planning than women, as well as those
employees who are 31-40 compared to
other age groups.
In general, Brazilians own few ?nancial
products. A savings fund is the most
frequently owned product, but barely half
7
A Global Nielsen Consumer Report, January 2011, p. 7. www.nielson.com
In general, Brazilians own few
?nancial products. A savings
fund is the most frequently
owned product, but barely
half of those surveyed even
have this basic instrument.
While this phenomenon may
have some cultural roots, it is
also a result of the fact that
the country is an emerging
market with a growing yet
modest per capita GDP.
2011 STUDY: BRAZIL 31
of those surveyed even have this basic
instrument. While this phenomenon may have
some cultural roots, it is also a result of the
fact that the country is an emerging market
with a growing yet modest per capita GDP;
many workers have less disposable income to
spend on these products or lack the ?nancial
education to make decisions about buying
them. Many, therefore, rely on their employer
for the bene?ts. Of those who do not own any
products, 71% of those surveyed said that this
is because their employer does not offer them.
Top Workplace Bene?t:
Staying Healthy Is
of Mutual Interest
and Concern
Given this background, employees who do
own ?nancial products are more likely to own
them through the workplace. This can be due
to the reasons cited above as well as the fact
that employers tend to cover some if not all of
the cost when they do offer bene?ts. Health
insurance, life insurance and dental insurance
are the top products owned. However, term
life insurance is more likely to be purchased
outside of the workplace.
Employees do take advantage of the products
that are offered, and those who don’t
have products through the workplace are
interested. At the same time, more than half
of Brazilian employees are very keen to select
bene?ts according to their personal needs.
Of most interest to all Brazilian workers is
health insurance, cited by 90% as the most
essential product. This is followed by life
insurance, dental and medical check-ups.
Companies and workers seem to be on the
same page regarding the desirability and
value of health bene?ts. Of those companies
offering health or dental bene?ts, 63% see an
extremely high value in having an insurance
provider offer information or programs that
help employees stay healthy, and four in 10
offer such assistance.
Moreover, about half of those Brazilian
employers not currently offering health
insurance to their workers said they planned
to do so in the next three years. About three
in 10 employees are interested in purchasing
this product through their employer.
Gasoline ticket
Personal accident insurance
Health check-up
Food benefit
Salary continuation in case of illness
Retirement plan
Grocery ticket
Dental insurance
Life insurance
Health insurance 90%
72%
59%
56%
53%
48%
43%
30%
29%
19%
BENEFITS CITED AS ONE OF TOP FIVE “MOST IMPORTANT” BY EMPLOYEES
Percentages have been rounded to the nearest whole number.
Helping employees make better financial decisions
Helping employees make better benefits decisions
Addressing diverse needs of employees
Reducing HR administrative costs
Retaining employees
Attracting employees
Controlling health and welfare benefit costs
Increasing employee productivity
Increasing employee job satisfaction
83%
79%
82%
82%
78%
87%
73%
66%
73%
84%
65%
61%
63%
52%
58%
69%
57%
56%
Brazil U.S.
MOST IMPORTANT BENEFITS OBJECTIVES OF ALL EMPLOYERS
Companies are also interested in supporting
their workers’ quest for work/life balance;
in fact, it is the number one employee
bene?t strategy among those who already
offer bene?ts. Nearly 70% of employers are
interested in providing bene?ts that improve
the work/life balance of their workers. Such
bene?ts include job sharing, ?exible working
hours and telecommuting.
Brazilian women tend to have higher ?nancial
concerns and are even less ?nancially prepared
than men for retirement and other objectives.
Both domestic companies and foreign multi-
nationals should pay attention to their female
workers. They represent a growing segment
of the working population in Brazil: the active
female working population grew on average
3.6% per year from 2001 to 2008, while the
male working population grew only by 1.9%.
Furthermore, from 2000 to 2006, the per
capita income for women grew 7.3%,
compared to 2.6% for men in the same
period.
8
It is also important to note that, in
Brazil, men earn more than women for the
same work. This trend is changing, though,
and women workers are catching up.
Worker Loyalty and
Bene?ts: Making a
Stronger Connection
The top bene?ts objective of Brazilian
employers who offer bene?ts is to increase
the job satisfaction and productivity of their
workers. Keeping workers happy in their jobs
is cited by 83% of Brazilian companies as
their number one objective (the fourth top
objective for U.S. companies).
Nearly equal importance is given to the goal
of increasing productivity, which follows
at 82% (this ranks third for American
employers). More than half of all companies
said they had increased their productivity.
Employee retention ranks fourth for
companies with bene?ts programs (73%
cite it as extremely or very important).
Interestingly, retaining employees is the
number one objective among employers
who do not offer employee bene?ts — a full
93% say they are extremely concerned, tied
with increasing employee job satisfaction.
Percentages have been rounded to the nearest whole number.
2011 STUDY: BRAZIL 33
And among all employers, three-quarters
rate attracting and retaining employees as
extremely or very important.
As with other countries in the survey, there
is a potential disconnect for employers, who
apparently underestimate the tie between
offering bene?ts and attaining objectives.
Like their counterparts elsewhere, Brazilian
employees with workplace-provided bene?ts
express higher job satisfaction and loyalty to
their employer. This disconnect is magni?ed
when one takes into account that 30% of all
employers from diverse sectors in Brazil expect
a shortage of labor in the near future.
Nearly 70% of all companies agree with the
idea that they have strong loyalty to their
workers, while only 49% of the latter feel
this way. And the reverse seems to be true
as well, with 72% of employees professing
loyalty to the company, while only 48% of
management feel this is so.
Clearly, offering bene?ts could help companies
not only achieve their top goals — whether
those are retaining employees or making them
happy — but also overcome a divergence of
views on loyalty. Closing this gap is important
for both worker morale and productivity,
especially since 69% of all workers are worried
about being able to afford the bene?ts
package that is right for their family.
Voluntary bene?ts could play a role in the
Brazilian workplace. Employers see advantages
to voluntary bene?ts for their employees, where
the ease of enrolling in workplace bene?ts
provides employees with the best products
and rates as well as having a payroll deduction,
which is a convenient way for employees to
make payments. About half of all employees
see voluntary bene?ts as a convenient way to
save and to pay for products.
Retirement /Financial
Security: Planning
to Retire but
Not Planning for It
As in other parts of the world, development
and economic growth have positively affected
longevity in Brazil. Life expectancy increased
more than 10 years since 1980, to 73.7 years,
and it is projected to increase nearly another
eight years by 2050.
8
Brazilians, like others in many parts of the
world, are not doing enough to prepare for
retirement. The average Brazilian worker
intends to retire at 56 years; yet only three in
10 have taken any steps to determine their
retirement income needs and only one in four
has a private retirement plan.
This inaction comes despite the fact that
Brazilians have — like Mexican and Indian
workers in this study — serious ?nancial
concerns about their future. Seventy percent
of Brazilian workers say they are extremely
Employees with Benefits Employees without Benefits
Employees have strong loyalty to company
Company has strong loyalty to employees
Employees are satisfied with their job
64%
55%
75%
65%
52%
42%
JOB SATISFACTION AND LOYALTY TO COMPANY AMONG EMPLOYEES WITH BENEFITS
Percentages have been rounded to the nearest whole number.
8
http://www.ibge.gov.br/english
concerned about being able to afford health
care in retirement, while 69% are worried
about outliving their retirement savings (also
the second main retirement concern for
U.S. workers).
A majority of Brazilian workers (63%) are also
concerned about having enough ?nancial
resources to take care of their aging parents
or relatives. Our study found that more
than half of older Brazilian employees are
concerned about becoming a burden on their
children. Financing their own long-term care
needs is cited as a major worry by 62% of
Brazilians. Of those Brazilians who take care
of dependent parents, 70% are living from
paycheck to paycheck.
This lack of saving for retirement could have
multiple causes. First, it’s a question of cash ?ow
and af?uence. Many simply cannot afford to
save money for their golden years and put food
on the table day in, day out. As the Brazilian
middle class grows, this should improve.
Second, Brazilians are likely counting on their
government-sponsored pension to cover
their costs and needs in retirement. There is
an expectation that this state pension will
be enough, despite the fact that Brazilians
are living longer.
Third, Brazilians have a lackluster track record
of saving. According to a 2009 report from
the Economist Intelligence Unit, Brazil ranked
last among 24 countries with a savings rate
of only 15% of gross domestic product. This
compared to 54.5% for China; 31% for India;
24% for Argentina; and 21.7% for Mexico.
The bright spot is that education on ?nancial
planning could help Brazilians overcome
these obstacles. While two-thirds of Brazilian
employees say they are con?dent in their
ability to make the right ?nancial decisions,
more than a third have limited time to do
the research or consider themselves to be
beginner investors, and thus probably in need
of planning assistance.
About half of Brazilian workers who already
receive bene?ts said they are interested in
their employers providing access to ?nancial
planners to help with retirement issues as well
as bene?ts plans advisors. But companies will
need some persuading as four in 10 responded
that they would not consider any ?nancial
education as a bene?t for their employees.
Having to work full-time or part-time
to live comfortably in retirement years
Providing for your spouse’s long-term care needs
Providing for your own long-term care needs
Having enough money to take care of elderly parents or in-laws
Outliving retirement money
Being able to afford health care in retirement years
70%
N/A
69%
52%
63%
35%
62%
45%
58%
N/A
57%
47%
Brazil U.S.
EMPLOYEES’ TOP FINANCIAL CONCERNS REGARDING RETIREMENT
Percentages have been rounded to the nearest whole number.
2011 STUDY: BRAZIL 35
Conclusion
Brazil is a major force in both its own
region, where it is the largest economy
and has the largest population, and in the
global marketplace, where it belongs to
that exclusive club of high-growth BRIC
countries. Brazil is also the largest insurance
market in Latin America and one of the
fastest growing. A net external creditor
since 2008,
9
Brazil will only become a more
in?uential economic player as it transitions
from an emerging market to a developed
one in the coming years. The country has an
impressive combination of natural resources,
commodities and high value-add industrial
manufacturing.
As Brazil develops economically and its middle
class grows, there will likely be an impact on
the labor market, workplace bene?ts and
what other options employers are willing
to provide for their workers. Both domestic
companies and foreign multinationals still
enjoy a buyer’s market for labor but this, too,
is beginning to change as 30% of companies
expect an imminent labor shortage. To stay
ahead of the curve on bene?ts strategies,
domestic and international HR and bene?ts
managers should look at the following
options in Brazil.
• Focus on ?nancial education: Brazilian
workers are living longer but not saving
for retirement. This is an opportunity for
bene?ts providers to work with companies
on ?nancial planning and education for
employees, who have expressed an interest
in obtaining advice. As the middle class
grows in Brazil, the market for income
supplements to the government pension
could also increase.
With education about ?nancial planning,
employees will have a better understanding
of the products that can lead them to a
more secure retirement. If they have the
tools to prepare for a more ?nancially
sound future, they can ease the stress of
becoming a burden on children.
• Emphasis on voluntary bene?ts: Bene?ts
providers could show employers how
voluntary bene?ts will not add to their
costs but still enable them to offer more
bene?ts to employees. This will also help
with their key employee objectives —
job satisfaction and employee retention.
Since few Brazilian employers offer
“executive” bene?ts, companies could
consider starting with voluntary bene?ts
for these key employees since they may
have more ?nancial capacity to pay the
costs of the bene?ts.
• Financial independence for women
workers: Both domestic companies and
foreign multinationals would do well
to pay attention to the goals of their
female employees. Brazilian women are
increasingly an important segment of the
workforce and will have more disposable
income as they achieve middle class status.
Bene?ts providers have an opportunity to
educate the female employee population
on ?nancial planning to ensure a secure
?nancial future.
Offering bene?ts could help
companies not only achieve their
top goals — whether those are
retaining employees or making
them happy — but also overcome
a divergence of views on loyalty.
9
https://www.cia.gov/library/publications/the-world-factbook/geos/br.html
India
2011 STUDY: SECTION 37
Bene?ts at a Glance
Retirement bene?ts are dominated by a
government-mandated employer bene?t called the
Gratuity, by which every employee, upon leaving
his or her employer after more than ?ve years of
service, collects 15 days of last drawn salary for
each year of service.
Workers may also save for retirement with a tax-
favored vehicle called a Public Provident Fund, to
which some employers also contribute.
The life insurance market is dominated by the
government-owned Life Insurance Corporation of
India, but private insurers continue to enter the
Indian market, as joint venture partners or minority
stakeholders in ?rms.
The Pension Fund Regulatory and Development
Authority is expected to pave the way for more
modern ?nancial products. In its current form,
it offers the cheapest accumulation vehicle for
building a retirement nest egg. However, it has
seen limited success since the distributors’ bene?t
in offering this as a solution is limited.
Post of?ces have been offering monthly income
products which give a guaranteed payout and
are widely accepted as an effective tool to derive
an income.
Life insurance companies have been offering
annuity products. However such products
contribute only about 2% of the product mix
for the industry.
Market Pro?le
1
• 11th largest global economy
• GDP of $1.4 trillion: Services (55%);
Industry (29%); Agriculture (16%)
• GDP per capita of $3,400
• Major emerging economy with rapid growth;
poverty is pervasive
• Foreign direct investment net in?ows
$34.5 billion
• Population 1.15 billion;
labor force of 478 million
• Life expectancy at birth 66.8 years
• Median age 25 years
1
Sources for this section are either The CIA World Fact Book or The World Bank or The IMF. All ?gures are in U.S. dollars.
2011 STUDY: INDIA 37
MOST IMPORTANT BENEFITS OBJECTIVES OF ALL EMPLOYERS
2
http://www.chinadaily.com.cn/opinion/project/2011-01/11/content_11826903.htm
3
http://www.worldbank.org.in/WBSITE/EXTERNAL/COUNTRIES/SOUTHASIAEXT/INDIAEXTN/0,,contentMDK:20195738~pagePK:141137~piPK:141127~
theSitePK:295584,00.html
WITH A POPULATION OF MORE THAN ONE BILLION,
INDIA IS THE WORLD’S LARGEST DEMOCRACY AND IS
EXPECTED TO BE THE MOST POPULOUS COUNTRY BY
MID-CENTURY.
2
India’s Economic Growth
Transforming Society
and Raising Expectations
INDIA
Reducing HR administrative costs
Retaining employees
Addressing diverse needs of employees
Attracting employees
Increasing employee job satisfaction
Helping employees make better financial decisions
Controlling health and welfare benefit costs
Increasing employee productivity
91%
82%
88%
87%
87%
56%
86%
79%
86%
66%
79%
52%
76%
84%
68%
61%
India U.S. Percentages have been rounded to the nearest whole number.
India has a burgeoning middle class and a
rising standard of living, but poverty remains
a major challenge and social issue. About
410 million people, more than one-third of
the country, live in poverty, which has a large
impact on the labor market and attitudes
toward ?nancial security, retirement and
workplace bene?ts.
3
India’s economic rise is a genuine success
story and an engine of transformation for
both its society and global markets. India’s
economy grew at least 7% annually for
more than a decade, making it a global
economic powerhouse and a core member of
the informal club of high-growth emerging
markets known as “BRICs” (along with Brazil,
Russia and China). Of course, India was not
immune to the global economic crisis of 2008-
2009; but in a display of resilience, the Indian
economy nevertheless rebounded strongly in
2010, with more than 8% growth, driven in
large part by domestic demand.
India’s services sector, including outsourcing,
is a major source of its economic growth,
with both domestic companies as well as
many multinational companies investing in
and setting up operations there in recent
years. In particular, the presence of foreign
multinationals, which often offer a more
generous or diverse set of bene?ts, is
contributing to a changing bene?ts landscape
in India over the long term.
2011 STUDY: INDIA 39
In part because of the country’s
strong economic performance
and the rise of its middle class,
Indian employees are very
con?dent and optimistic.
In part because of the country’s strong
economic performance and the rise of its
middle class, Indian employees are very
con?dent and optimistic. India topped a
global consumer con?dence study released in
early 2011, though this ?gure marked a drop
from its record high in 2006. Indians remain
worried about in?ation, possibly due to rising
global food and commodity prices.
4
When discussing attitudes of employers and
employees toward workplace bene?ts in India,
it is essential to bear in mind that the country
has a surplus of labor, a young population and
a culture — similar to that in Mexico/Brazil —
of extended families taking care of aging
parents and elderly relatives.
Workplace: Labor
Surplus and Cost
Limiting Bene?ts
While foreign multinationals have caused
wages to rise in certain sectors and are
in?uencing the types of bene?ts offered,
Indian employers nevertheless continue to
provide only a limited bene?t offering to their
employees. With the exception of health and
critical illness insurance, less than half of all
employers offer any other products. The labor
surplus and cultural factors, plus the cost of
bene?ts, continue to play a role here and
in?uence employer attitudes as they did in the
?rst survey four years ago.
• Increasing employee productivity (91%)
and controlling health and welfare bene?t
costs (88%) are the top two bene?ts
objectives of those companies providing
bene?ts. This is slightly down from the
96% level for both in our 2007 study.
While also of high concern to employers,
attracting and retaining employees
Increasing employee
productivity (91%) and
controlling health and
welfare bene?t costs
(88%) are the top two
bene?ts objectives of
those companies providing
bene?ts. Those employers
who offer bene?ts could
reap the reward of higher
worker productivity.
4
http://www.nielsen.com/content/dam/corporate/us/en/reports-
downloads/2011-Reports/Nielsen%20Global%20Consumer%20
Con?dence%20Report%20-%20Q1%202011.pdf
2011 STUDY: INDIA 41
nevertheless rank near the bottom as
reasons to offer bene?ts.
• Indian employees, even those without
bene?ts, express high satisfaction with their
jobs and are very loyal to their employer.
Seventy-two percent of employees say
they are satis?ed with their jobs, which is
unchanged from four years ago. Employee
and employer views on company loyalty
are also aligned, with 67% of employees
and 65% of employers agreeing that the
“company has strong loyalty to employees.”
• Seventy-?ve percent of those Indian
employees who do not own any ?nancial
products through the workplace say
it is because they are not offered by
their employer.
Those employers who offer bene?ts could
reap the reward of higher worker productivity,
the study found. While 57% of all companies
said productivity had increased in the past
year, the number jumps to 68% for those
companies offering bene?ts.
Financial planning is another bene?t that,
while currently eschewed by employers, could
improve productivity and job satisfaction
while enhancing the ?nancial security of
employees. More than half (56%) of all
employees consider themselves novice
investors, and an equal number is interested
in employer-provided ?nancial advice,
including for retirement.
A majority of employers and their workers
agree on the advantages of voluntary
bene?ts, an attitude consistent with the
results of the ?rst survey. Fifty-two percent
of companies view voluntary bene?ts as a
cost-effective way to meet diverse needs of
their workforce, while employees value the
convenience of obtaining them through the
workplace (58%) and trust their employer as
a source of objective information (51%).
India U.S.
65%
53%
62%
48%
62%
36%
60%
50%
59%
48%
59%
61%
58%
N/A
56%
40%
56%
N/A
55%
39%
Enough money to buy a home
Enough money so one can stay home with children
More time to spend with family
Being able to afford quality childcare
Enough money to pay bills during sudden income loss
Enough money for children’s education
Job security
Resources and time to care for aging parents or relatives
Appropriate health insurance
Enough money to make ends meet
TOP FINANCIAL CONCERNS OF ALL EMPLOYEES
Percentages have been rounded to the nearest whole number.
• Two-thirds of all employees in India
are extremely concerned about loss of
income from premature death or disability,
down from 81% in 2007 but still higher
than the level of concern of their U.S.
counterparts (51%).
Despite this acute concern over ?nancial
security, Indian employees own few ?nancial
products and are not taking steps to protect
themselves. Only 45% of Indian employees
have assessed their household’s health
insurance needs, although this increases to
62% for employees 51 years and older.
The sole exception is life insurance, where
more than 80% have taken steps to ascertain
their needs. The majority of employees
with life insurance purchase it outside the
Financial Security/
Retirement: A Bene?ts
Market in Its Infancy
Indian employees have signi?cant and wide-
ranging ?nancial concerns, with basic needs
topping the list. Interestingly, our 2011 results
represent double digit improvements over four
years ago — and are thus in line with the high
levels of optimism and con?dence among
Indian employees.
• “Having enough money to make ends
meet” is cited by 65% of Indian employees
as their number one ?nancial concern; this
is an improvement of 15 points from four
years ago; Indian employees 51 years and
older are somewhat less concerned with
making ends meet (54%), which is virtually
at parity with the level of concern of their
U.S. counterparts (53%).
• Having the right health insurance is the
second top concern, but dropped 20 points
from four years ago to 62% today (48%
of American workers cite this as a high
concern); Indian employees cite having
enough resources and time to care for
relatives as their third top concern — this,
too, improved by 17 points to 62% today.
Though retirement looms as
a source of ?nancial 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.
India U.S.
62%
N/A
60%
47%
60%
45%
59%
52%
57%
N/A
55%
35%
Having enough money to take care of elderly parents or in-laws
Providing for your spouse’s long-term care needs
Outliving retirement money
Providing for your own long-term care needs
Having to work full-time or part-time
to live comfortably in retirement years
Being able to afford health care in retirement years
EMPLOYEES TOP FINANCIAL CONCERNS REGARDING RETIREMENT
Percentages have been rounded to the nearest whole number.
2011 STUDY: INDIA 43
workplace, while health insurance is obtained
predominantly through one’s employer.
Though retirement looms as a source of
?nancial worry, few Indian employees are
taking steps to prepare for it. Life expectancy
overall is 66.8 years in India, a major improve-
ment in the last several decades but still the
lowest of the ?ve countries in this survey.
Only one in four Indians has taken any steps
to prepare for retirement and even fewer —
one in six — have begun planning for it.
Cultural factors could be at work here. Fully
half of all Indian employees say they do not
plan to retire. This could re?ect the relatively
young age of the working population, an
ambitious, entrepreneurial and interested
group highly motivated to improve their
standard of living.
This 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% of
employees in India say they are extremely
concerned about having enough money
to provide for elderly parents or in-laws.
Thus, younger workers could be planning to
continue in their jobs in later years to support
their aging parents and relatives. With
economic development and a more mobile
society, this tradition, however, is changing.
85%
15%
No
Yes
EMPLOYEES WHO HAVE DONE ANY
PLANNING FOR RETIREMENT
Regional Differences:
It’s a Big Country —
Adapt Your
Bene?ts Strategy
Signi?cant regional differences exist in
India when it comes to workplace bene?ts.
Opportunities abound in all the markets,
though to varying degrees and regarding
different products. In descending order of
population size:
• Mumbai: Employers and employees in
India’s largest city
5
(16.3 million inhabitants)
are relatively less receptive to bene?ts,
though a majority of companies offer
packages to executives. Employees in
this city on the northwestern coast are
signi?cantly unprepared for their retire-
ment but are very interested in receiving
retirement advice at work. Retirement
planning may be bene?cial for this market.
• Kolkata: Employers in India’s second largest
city (13.2 million), located in the northeast
near the border with Bangladesh, are least
positive about bene?ts and their employees
have low job satisfaction. There is an
opportunity here for bene?ts providers to
educate employers in Kolkata about the
direct connection between better bene?ts
and improved employee satisfaction.
• Delhi: The national capital and third-largest
city (12.8 million) is most receptive, as
employers are positively inclined toward
bene?ts, and employees have high ?nancial
concerns and high interest and receptivity
toward bene?ts. Employees have the
highest interest in receiving ?nancial,
bene?ts and retirement advice at work.
Financial advice based on life stage may be
a good opportunity for this city.
• Chennai: Employees in this city of 6.4
million on the southeastern coast expect
to retire but few have done any planning.
About half are interested in having their
employer provide advice for retirement.
For bene?ts providers, retirement planning
may be a good opportunity in this market
as well, but employers are going to be
a challenge.
• Bangalore: Employers in the ?fth largest
city in India (5.6 million) — a center for
software development and outsourcing
in the southern middle of the country —
offer relatively few products to their
employees. No surprise then that workers
in Bangalore own fewer ?nancial products.
Both groups are also less open to voluntary
bene?ts. Employees indicate some interest
in professional help in ?nancial matters.
Financial planning may therefore be a good
offering for this market.
• Hyderabad: Employees in this city of
5.5 million in southern Andhra Pradesh
State tend not to consult with ?nancial
professionals but express an interest in
getting ?nancial advice through work.
Employers are receptive to offering
?nancial advice and are also positive
regarding employee bene?ts. Financial
planning is a way to enter this market,
and the education of employers and
employees on the advantages of voluntary
bene?ts is critical.
• Ahmedabad: Employees in this city of
4.5 million north of Mumbai plan to
retire but few have done any planning.
More than six in 10 are interested in
having their employer provide advice for
retirement. Interest in voluntary bene?ts is
low. Retirement planning may be a good
opportunity in this market as well.
5
http://www.citymayors.com/gratis/indian_cities.html. This site is source for all Indian city pop. ?gures.
2011 STUDY: INDIA 45
Conclusion
India is already a major force in the global
economy, and this position will solidify and
strengthen as the country transforms itself
from an emerging market to a developed one
in the coming years. Domestic companies are
creating jobs in diverse industries from steel
and automobiles to software development
and agribusiness. Foreign multinationals
continue to ?ock to India for its well-
educated, English-speaking and, until now,
comparatively inexpensive labor force.
As India develops economically and more
of its citizens join the middle class, the
labor market, workplace bene?ts and what
employers are willing to provide for their
workers could be affected. Both domestic
companies and foreign multinationals still
enjoy a buyer’s market for labor but this,
too, is beginning to change. To stay ahead
of the curve on bene?ts strategies, domestic
and international HR and bene?ts managers
should look at the following options in India:
• Offering a wider array of bene?ts or
making basic bene?ts more available may
help employers reach their number one
bene?ts objective, which is increasing
worker productivity. Health insurance and
term life insurance are low-hanging fruit
because they are viewed as core products
by a majority of employees and with
proper management can help companies
achieve their second top goal — cost
control of health and welfare bene?ts.
• With the majority of employees both
concerned with and unprepared for
retirement, companies should consider
providing retirement planning services and
?nancial education as a bene?t option.
India’s strong economic growth has
made its workforce more mobile, which
is affecting the tradition of older Indians
being cared for by their children. In this
context, companies can take the lead in
addressing this trend by helping employees
understand what they need to secure their
?nancial and retirement future.
• Exploring the addition of voluntary
bene?ts — with most or all of the cost
picked up by employees — could help
both sides achieve their ?nancial goals.
Since there is overall a strong mutual
consensus about the utility of having access
to voluntary bene?ts, companies should
seriously consider expanding their offerings
to employees to include high-interest
items, including life insurance.
None
Maternity allowance
Company car
Education loan
Housing allowance
Paid vacation
Gratuity
Bonus
Provident fund 76%
73%
56%
51%
39%
22%
11%
10%
10%
OFFERINGS TO EMPLOYEES BY EMPLOYERS
Percentages have been rounded to the nearest whole number.
Mexico
Bene?ts at a Glance
A mandatory retirement savings system is paid
for by employers, at 2% of wages, and managed
in individual investment accounts by registered
organizations known as Afores. In 2009, the
government adopted reforms allowing the Afores,
which manage about $100 billion in assets, to gain
access to local private equity funds.
3
Mexico has a decentralized national health system,
but employees who can afford private care tend to
use it and buy insurance for it.
Market Pro?le
1
• 14th largest global economy
• GDP of nearly $1 trillion: Services (63%);
Industry (33%); Agriculture (4%)
• GDP per capita of $9,700
• Free market economy hard hit by the global
?nancial crisis but rebounding in 2011;
mix of modern and outmoded industries,
and the world’s 7th largest oil producer
• Net in?ows of foreign direct investment:
$13.9 billion
• Population 112 million
2
;
labor force 57.8 million
2
• Life expectancy at birth: 76.4 years
• Median age: 27.1 years
1
Sources for this section are either The CIA World Fact Book or The World Bank or The IMF. All ?gures are in U.S. dollars.
2
Source: INEGI 2011 (Instituto Nacional de Geografía y Estadística)
3
Private Equity Manager, 3/9/11
2011 STUDY: MEXICO 47
4
http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/0,,pagePK:180619~theSitePK:136917,00.html
5
World Bank, ibid
6
http://hk.nielsen.com/documents/GlobalConsumerCon?denceReport_Q42010.pdf
MEXICO, THE SECOND LARGEST ECONOMY IN LATIN
AMERICA,
4
EXPERIENCED THE GLOBAL FINANCIAL
CRISIS IN 2008-2009 WITH PARTICULAR FEROCITY.
Two Steps Forward,
One Step Back
as Country Copes
With Economic Crisis
MEXICO
TOP FINANCIAL CONCERNS OF ALL EMPLOYEES
Being able to afford quality childcare
Resources and time to care for aging parents or relatives
Enough money so one can stay home with children
Enough money to buy a home
Enough money to make ends meet
Appropriate health insurance
More time to spend with family
Enough money for children’s education
Job security
Enough money to pay bills during sudden income loss
73%
61%
71%
50%
69%
48%
68%
40%
67%
48%
65%
53%
59%
39%
57%
N/A
56%
36%
47%
N/A
Mexico U.S. Percentages have been rounded to the nearest whole number.
Mexico’s robust growth from 2004 to 2007 —
when the ?rst edition of this trends study was
published — gave way to a major contraction
of 6.5% in 2009. The country is slowly climbing
out of this hole with growth projected at
4.5% for 2010 and 3.8% for 2011.
The global recession has highlighted economic
fault lines in Mexico — close to half of all
Mexicans still live in poverty
5
— and both
the government and private sector have a
major challenge to create the growth that will
broaden prosperity for a wider swath of the
population. A full and realistic discussion of
employee bene?ts in Mexico should take this
socio-economic environment into account.
Consumer con?dence in Latin America as a
whole is increasing, with the region ranking
the highest in optimism in recent surveys. In
Mexico, con?dence is also on the rise, but it is
still four points below the global average and
well behind Brazil — the other Latin American
economy in our survey.
6
Financial hardship
persists and Mexican consumers continue to
have dif?culty paying bills and reducing debt.
Having enough money to pay bills led the list
of Mexican workers’ top concerns of ?nancial
security. A full 73% say they are “extremely
concerned” about having enough money
during sudden income loss.
Despite growing anxiety about their ?nancial
future, many Mexican workers say they are
not taking steps to address these concerns.
Less than half have taken any action to
determine their household’s life insurance
needs and only a quarter have looked into
their disability insurance options.
2011 STUDY: MEXICO 49
Despite growing anxiety about
their ?nancial future, many Mexican
workers say they are not taking
steps to address these concerns.
Cultural factors — such as a widespread
tendency to avoid planning for the future —
play a role, as does the fact that Mexican
employers are reluctant to offer bene?ts
beyond those mandated by law.
A Direct Correlation:
Bene?ts, Loyalty and
Job Satisfaction
As in our 2007 study, there is a strong
correlation between employer-provided
bene?ts and job satisfaction and loyalty to
one’s employer. The top bene?ts objective
for Mexican employers is to increase
employee productivity (97% of all employers),
with the second main goal of improving
job satisfaction (91%) — both results are
essentially unchanged from four years ago.
These objectives and percentages, our
study shows, are essentially the same for
employers who do not offer bene?ts.
In 2011, 83% of employees with bene?ts
said they were satis?ed with their current job,
compared to 59% of those who did not receive
on-the-job bene?ts. The overall job satisfaction
rate — with or without employer-provided
bene?ts — is 72%, down from 81% in the
2007 study but still relatively high, indicating
that the Mexican labor market favors employers.
Employees who receive bene?ts express a
stronger sense of loyalty to their employers —
73% — compared to those who do not,
at 55%. The overall loyalty ?gure is 64%.
Employees also regard this as a sign of
employer loyalty to their workforce with 64%
of employees with bene?ts saying so. And
56% of employees who receive bene?ts cite it
as a reason they stay with their company.
It should also come as no surprise, then,
that employees who work for a company
with bene?ts on average stay longer with
that company: 7.1 years versus 5.2 years for
employees who work at companies that do
not offer bene?ts.
MOST IMPORTANT BENEFITS OBJECTIVES OF ALL EMPLOYERS
Helping employees make better financial decisions
Helping employees make better benefits decisions
Reducing HR administrative costs
Retaining employees
Addressing diverse needs of employees
Attracting employees
Controlling health and welfare benefit costs
Increasing employee job satisfaction
Increasing employee productivity
97%
82%
91%
79%
87%
87%
85%
66%
83%
52%
82%
84%
78%
61%
76%
69%
70%
56%
Mexico U.S. Percentages have been rounded to the nearest whole number.
2011 STUDY: MEXICO 51
A New Solution
on the Horizon:
Voluntary Bene?ts
Many Mexican employers only provide those
bene?ts that are mandated by law, citing high
cost as the reason for not providing more
?nancial products and bene?ts. The burden
of paying for these products, especially life
and health insurance products, is shouldered
predominantly by the employer. Though
overall ?nancial product ownership is relatively
low throughout Mexico, the workplace is
nevertheless where most Mexican employees
purchase their ?nancial products, especially
those in larger companies and in higher
income brackets.
Moreover, there is growing interest among
employees of all types in getting greater
access to bene?ts and products.
Those currently without bene?ts are interested
in purchasing ?nancial products through the
workplace. Life insurance, savings plans, health
insurance and disability insurance were the top
four products of interest to these employees.
Adding voluntary bene?ts is also of high
interest to 56% of those employees surveyed
who currently enjoy some bene?ts in the
workplace. There could be an advantage
for both employer and employee in setting
up programs of voluntary bene?ts for the
workforce. The addition of a voluntary bene?t
program could help employers achieve their
key goals of improving job satisfaction and
employee retention.
Retirement/Financial
Security: More Planning
and Education Needed
Mexico introduced its state pension fund
system — the Afore — more than 10 years
ago to aid Mexican workers in funding their
retirement. Collectively, Mexican Afores
have about $100 billion in assets under
management.
7
But as we saw in Australia
with the super annuation fund, this source
of pension income will most likely not be
suf?cient as Mexicans are living longer.
Average life expectancy in Mexico is 76 years,
EMPLOYEES’ TOP FINANCIAL CONCERNS REGARDING RETIREMENT
Having enough money to take care of elderly parents or in-laws
Providing for your own long-term care needs
Providing for your spouse’s long-term care needs
Outliving retirement money
Having to work full-time or part-time
to live comfortably in retirement years
Being able to afford health care in retirement years
75%
N/A
73%
47%
69%
52%
69%
N/A
65%
45%
58%
35%
Mexico U.S.
7
“A Less Taxing Mexico,” Private Equity Manager, March 9, 2011
Percentages have been rounded to the nearest whole number.
relatively close to that of its northern NAFTA
neighbors, the United States (78 years)
8
and
Canada (81 years).
9
Given their longevity, Mexicans are justi?ably
concerned about retirement. But more than
one third of those surveyed (36%) don’t know
at what age they will retire. For those who
expect to retire, the median age they cite is
60 years.
The top three ?nancial concerns about
retirement are:
• “Being able to afford health care in
retirement years”— 75%, up from 71%
four years ago.
• “Having to work full-time or part-time
to live comfortably in retirement”—
with 73% citing this as a top concern,
basically unchanged from our previous
study and compared to 47% of U.S.
workers surveyed.
• The third top concern is “outliving
retirement money,” with 69% of Mexican
workers citing this, up slightly from 67%
in 2007 and compared to 52% of their
U.S. counterparts.
8
http://www.cdc.gov/nchs/fastats/lifexpec.htm
9
http://www.cbc.ca/news/health/story/2010/02/23/life-expectancy-canada.html
10
Study of International Employee Bene?ts 2007, p.28
11
http://www.buyusa.gov/mexico/en/?nancial_insurance.html
76%
24%
No
Yes
EMPLOYEES WHO HAVE DONE ANY
PLANNING FOR RETIREMENT
Percentages have been rounded to the nearest whole number.
Insurance Market:
Large Potential with
Regional Differences
Mexico is the second largest insurance market
in Latin America after Brazil. According to the
Mexican Association of Insurance Services,
insurance services have until now experienced
low market penetration in Mexico, representing
only 1.9% of the total GDP, compared to 12%
for the United Kingdom, 9% for the U.S., and
4% for Chile.
11
Given the large market and
low penetration, there is a huge potential for
insurance services in Mexico.
This market potential was noted in our
2007 study and recon?rmed by our current
results. In 2011, only 41% of employees
surveyed have taken any steps to determine
their life insurance needs, while only 24%
have researched their households’ disability
insurance requirements. But there is interest
among Mexican employees who do not
currently have bene?ts through their company
to purchase ?nancial products through
the workplace.
But employee bene?ts providers should
take into account the signi?cant regional
differences that exist in Mexico’s key urban
industrial centers that were surveyed: Mexico
City, Guadalajara, Monterrey and Leon
(new for the 2011 study). Mexico City and
Monterrey tend to have larger companies,
while Guadalajara is home to mid-sized ?rms
and Leon to smaller businesses. Company
size affects the kind and quantity of bene?ts
offered as well as the type of employees hired.
• Mexico City: Employees have the highest
?nancial concerns of those surveyed.
They are interested in getting products
through their employer but do not see the
advantages of voluntary bene?ts. However,
Despite this high level of concern, only one
in four Mexican employees has done any
planning for retirement or taken any steps
to determine what their needs would be in
retirement. This is still an improvement over
the previous study, when only one in ?ve had
done any retirement planning.
10
Among those
employees who have planned for retirement,
about half said they are either on track or
have achieved their goals.
Though society is changing, the extended
family continues to play a central role in
Mexican culture and has an impact on
retirement. Since one in ?ve Mexicans
currently has parents who depend on them
?nancially, most employees are also concerned
about long-term care needs for their parents,
as well as for themselves and their spouses.
With most Mexican employees owning only a
few ?nancial products acquired through the
workplace, it is clear that ?nancial planning
continues to elude the majority of workers.
But both employees and employers have
shown interest in bringing ?nancial planning
and education to the workplace.
Of the employees who own a ?nancial product
through the workplace, 62% expressed
interest in employers providing the services of
?nancial planners (72% for larger companies).
This aligns with the Mexican employers’ most
important bene?t strategies where retirement,
general ?nancial planning and retirement
education rank in the top four.
Among those employees who
have planned for retirement, about
half said they are either on track
or have achieved their goals.
2011 STUDY: MEXICO 53
employers don’t offer many bene?ts and
are not that interested in offering more in
the near future. But many are concerned
about a workforce shortage, so educating
employers about the link between bene?ts
and retention might be a good strategy in
Mexico City. Educating employees about
the advantages of voluntary bene?ts might
help as well.
• Guadalajara: Employers offer more bene?ts
than required by law, and employees are
more inclined to own bene?ts through
work. But there is a high level of ?nancial
concern among employees, with more than
half saying they don’t know when they will
retire and almost 90% having taken no
steps to plan for retirement. Workers are
more interested in voluntary bene?ts and
?nancial planning, so education would
also work as a strategy in this city.
• Monterrey: Employers tend to offer only
those bene?ts required by law. But they
have a somewhat positive attitude toward
voluntary bene?ts and ?nancial planning.
Employees in this city are less con?dent in
making ?nancial decisions and signi?cantly
unprepared for their retirement. Retirement
planning may be bene?cial for this market.
Education of employers and employees
on the advantages of voluntary bene?ts
is crucial.
• Leon: Although employers in Leon offer
basically only those products required
by law and not much more, they face a
possible worker shortage. Employees tend
to own products through work and are
positively inclined to voluntary bene?ts.
They have moderate ?nancial concerns,
with 60% not prepared for retirement.
Education on voluntary bene?ts and
?nancial planning could be a door opener
in this city.
Conclusion
As Mexico returns to the path of economic
growth, companies will have the opportunity
and challenge of revisiting and revising their
bene?t strategies and offerings. Mexico is
the second largest economy and insurance
market in Latin America, so there will be
large potential for bene?ts providers to gain
market share if they have the right approach
and product set, and tailor this to the existing
regional differences this report has outlined.
TOP BENEFITS STRATEGIES OF EMPLOYERS THAT OFFER BENEFITS
Outsourcing benefits administration
Build or expand benefits website
Internet access for all employees
Common platform for administration
Employee self-service on internet/intranet
Cost shifting to employees
Wider array of voluntary benefits
General financial planning
Pension/retirement plan investment education
Retirement planning
Benefits to help work/life balance 74%
69%
66%
63%
59%
57%
56%
54%
51%
45%
44%
Percentages have been rounded to the nearest whole number.
A key ?nding is that more than half of
Mexican employers mentioned that they
would like to shift the costs of bene?ts to their
employees. Bene?ts providers can work with
employers to ?nd ways to pass on some of the
cost to employees. Education can be a useful
tool for bene?ts providers in this regard.
• As a starting point, providers can focus on
?nancial planning assistance and voluntary
bene?ts. These have the advantages of
providing bene?ts to employees without
the employer taking on large administrative
and cost burdens. Employees in the four
main regions expressed varying degrees
of favorability toward obtaining voluntary
bene?ts and ?nancial planning assistance
through the workplace.
• Employers need to better understand
the role that bene?ts can play in helping
them address their top HR concerns —
maximizing job satisfaction and employee
retention. Employers who offer bene?ts
already see this value, so they merely need
to be reminded, and helped to understand
the return on their investment. Employers
who don’t offer bene?ts don’t necessarily
realize the value bene?ts can bring in
increased job satisfaction. This is another
opportunity for education.
• Retirement, health insurance during
retirement as well as life and disability
insurance are the top line ?nancial
products of interest to Mexican employees.
Demand for these products should increase
as the Mexican economy expands and
grows. Retirement products with tax
bene?ts are also growing in this country.
There is growing interest
among employees of all types
in getting greater access to
bene?ts and products.
2011 STUDY: MEXICO 55
United
Kingdom
Bene?ts at a Glance
The government provides the Basic State Pension
and gives tax incentives for workers to fund their
own personal pensions. In 2012, the government
will introduce a new “personal accounts”
retirement program that will require a mandatory
3% contribution from employers, who must
automatically enroll their employees. Similar to
the trend well under way in the U.S., the U.K. is
moving from a classical pension or de?ned bene?t
system to a de?ned contribution system.
2
The National Health Service provides publicly
funded health care, but private health insurance is
also common.
The insurance and ?nancial products markets are
highly developed and competitive.
Market Pro?le
1
• 6th largest global economy
• GDP of $2.2 trillion: Services (77%);
Industry (22%); Agriculture (1%)
• GDP per capita of $35,100
• Highly developed, wealthy country and world
?nancial center
• Foreign direct investment net in?ows
$25 billion
• Population 62.6 million; labor force of
31.4 million
• Life expectancy at birth 80 years
• Median age 40 years
1
Sources for this section are either The CIA World Fact Book or The World Bank or The IMF. All ?gures are in U.S. dollars.
2
Best’s Insurance News, March 7, 2011
2011 STUDY: UNITED KINGDOM 57
HIGHLY INDUSTRIALIZED AND WEALTHY, THE UNITED
KINGDOM RANKS AS THE THIRD LARGEST ECONOMY
IN EUROPE AFTER GERMANY AND FRANCE AND IN
THE TOP 10 GLOBALLY.
Financially Savvy but
Underestimating the Value
of Employee Bene?ts
in a Changing Economy
UNITED KINGDOM
TOP FINANCIAL CONCERNS OF ALL EMPLOYEES
Appropriate health insurance
Being able to afford quality childcare
Resources and time to care for aging parents or relatives
Enough money so one can stay home with children
Enough money to buy a home
More time to spend with family
Maintaining standard of living
Enough money for children’s education
Enough money to pay bills during sudden income loss
Enough money to make ends meet
Job security
52%
50%
50%
53%
48%
61%
45%
48%
45%
N/A
42%
40%
38%
39%
26%
N/A
26%
36%
23%
N/A
21%
48%
United Kingdom U.S. Percentages have been rounded to the nearest whole number.
3
https://www.cia.gov/library/publications/the-world-factbook/geos/uk.html
4
http://hk.nielsen.com/documents/GlobalConsumerCon?denceReport_Q42010.pdf
The recent global recession hit the U.K.
economy particularly hard, due to the
importance of its ?nancial sector in London,
a global capital of ?nance. Sharply declining
home prices, high consumer debt, and
the global slowdown compounded the
U.K.’s problems, pushing it into recession
in the latter half of 2008 and prompting
the government to implement a number
of measures to stimulate the economy and
stabilize the ?nancial markets. In 2010, with
burgeoning public de?cits and debt levels,
the government initiated a ?ve-year austerity
program to lower budget de?cits.
3
With global stock markets rebounding in
2009 and 2010, there are signs of economic
recovery in the United Kingdom. Recent
consumer con?dence surveys have shown
an increase in con?dence in the U.K., but
the country still lags below the global
average.
4
Moreover, this con?dence is offset
by lingering worries about ?nances and
investments that arose from the ?nancial
crisis, especially among those workers closer
to retirement age.
Not surprisingly, compared to four years ago,
concern about a variety of basic ?nancial
issues has spiked among British workers.
• “Having enough money to pay bills
during sudden income loss” jumped
10 percentage points to 48% of U.K.
employees (compared to 61% for the
2011 STUDY: UNITED KINGDOM 59
Recent consumer con?dence
surveys have shown an
increase in con?dence in the
U.K., but the country still lags
below the global average.
U.S.). Women in the U.K. are even more
concerned: 59%, versus 42% for U.K.
men. “Having enough money to pay for
children’s education” rose 12% points to
45% of workers (48% in the U.S.).
• Even with the uptick in the economy,
concerns over job security also increased
5% from the 2007 study, with 52% of U.K.
employees saying they were “extremely
concerned” with this (compared to half of
American workers); and “having enough
money to make ends meet” rose 6%,
making it of extreme concern to half
of all U.K. workers (a similar number of
Americans, 53%, have this worry).
Despite this escalating ?nancial worry in the
U.K., bene?ts providers still have their work
cut out for them to change attitudes among
both employers and their employees when
it comes to purchasing additional products
to protect income, safeguard retirement or
secure other ?nancial goals like education. But
coming changes in the pension system in the
U.K., increasing longevity, the governmental
austerity program and overall economic
uncertainty could pave the way for greater
interest in a wider variety of bene?ts available
to employees in the workplace.
Brits and
Workplace Bene?ts:
Room for Expansion
and Education
Like their counterparts elsewhere in the
European Union, U.K. employees have broad
health care and some retirement coverage
from national government programs that are
supplemented by generous private pensions
from employers. All of these bene?ts are
currently under scrutiny as government
and employers grapple with ?nancial and
demographic pressures to budgets. In terms
of favorite bene?ts, workers in the U.K. list
paid vacation and holidays (87%) and sick
leave (78%) as the most important bene?ts
received on the job. A ?nancial bene?t —
company pensions — comes in third with 69%.
Britain also has a well-developed ?nancial
services industry that offers access to
numerous sophisticated products ranging
from insurance and pension annuities to
disability and supplemental medical insurance
outside the workplace. For these reasons,
the majority of employees do not recognize
the value of buying additional bene?ts
through their jobs because they buy them
independently on the open market.
For their part, U.K. employers provide a
minimum range of bene?ts, essentially
pensions, life insurance and private medical
(to supplement the national health care
coverage). About half of U.K. employers
offer executive bene?ts to their top echelon
management, with private medical insurance
far and away the most common (68%).
As in the other countries surveyed, the larger
companies tend to offer more bene?ts
in the United Kingdom. But employers
balk at offering more than a few basic
bene?ts — citing the high cost — and do
not see the connection between providing
more bene?ts and attaining their main
HR objectives: attracting and retaining
employees, increasing their job satisfaction
and boosting employee productivity.
Given the higher level of economic uncertainty
that now exists since our ?rst study, this
negative view of providing/acquiring
additional workplace bene?ts could represent
a disconnect for both groups, as well as an
opportunity that bene?ts providers could
capitalize on with education and outreach.
2011 STUDY: UNITED KINGDOM 61
• On the employee side, satisfaction with
bene?ts has increased compared to
2007, with half saying they are satis?ed,
an increase of 5% over the last study.
Moreover, one-?fth of employees are
placing greater value on their bene?ts.
• For their part, employers in the U.K. place
the highest priority on employee retention,
yet consistently underestimate the power
of bene?ts in driving employee satisfaction.
Only 23% of employers think that their
workers are happy with their bene?ts,
compared to 50% of employees. There is
also a disparity in how job satisfaction is
viewed, with only 41% of employers saying
their workers are content versus 53%
of employees feeling good about their
job. Bene?ts communications in the U.K.
could be a factor here, with nearly 75%
on both sides giving a low rating to the
effectiveness of bene?ts communications.
• The popularity of voluntary bene?ts that
we see in the U.S. has not reached the
same level in the United Kingdom. In the
U.S., 52% of U.S. workers said they value
the option to purchase voluntary bene?ts
through their employer; but only one in
?ve U.K. employees who receive workplace
bene?ts expressed a desire for a wider
array of voluntary bene?ts through the
workplace. With enhanced communications
and education around the advantages of
acquiring voluntary bene?ts through the
company, U.K. employees would begin to
see the value of this approach, such as more
choice, better rates and convenience.
5
Undoubtedly, bene?ts can contribute to
loyalty. When employees are satis?ed
with their bene?ts, they have higher job
satisfaction. Similarly, employers who feel
their employees are highly satis?ed with their
bene?ts also believe their company is loyal to
its employees, and their employees are loyal to
the company. As we noted above, companies
need to do a better job understanding the
connection between loyalty and bene?ts
and communicating this to their employees.
Bene?ts providers can play an important role
here in stimulating this dialogue.
5
9th Annual Employee Bene?ts Trends Study, MetLife, 2011
MOST IMPORTANT BENEFITS OBJECTIVES OF ALL EMPLOYERS
85%
84%
78%
79%
76%
82%
69%
66%
68%
87%
50%
69%
46%
52%
45%
61%
37%
56%
United Kingdom U.S.
Helping employees make better financial decisions
Reducing HR administrative costs
Addressing diverse needs of employees
Helping employees make better benefits decisions
Controlling health and welfare benefit costs
Attracting employees
Increasing employee productivity
Increasing employee job satisfaction
Retaining employees
Percentages have been rounded to the nearest whole number.
Financial Security/
Retirement:
Complacency Giving
Way to Concern?
Workers in the U.K. are con?dent about both
their ?nancial future and their abilities to plan
for it. About 75% of them have taken steps
to determine their life insurance needs — the
highest percentage of any country in this
study. Planning for disability, though, is much
lower, with only one-third having done so,
down nine points from 2007. This drop comes
despite the fact that concern about loss of
income from disability or premature death
actually rose three points each since the last
study (to 45%, and 43%, respectively).
Employees in the U.K. have done a good job
to date of planning for retirement, with
two-thirds having taken steps to determine
their income needs in retirement — this
applies consistently to all age groups except
the 21-30 segment, where 37% (still a
relatively solid showing) have done some
retirement planning. U.K. workers plan to retire
around age 63 and expect to live another
20 years. This is in line with their current life
expectancy at birth, about 80 years.
6
• Whereas more than half of U.S. workers
(52%) worry about outliving their
retirement funds, only one-third of workers
in the U.K. have this concern — this is
unchanged from four years ago. Women in
the U.K. worry more (42%) whereas their
male counterparts are more con?dent,
with only 29% worried about running out
of money in their golden years.
• The recent economic crisis, though, is
causing some anxiety in the U.K., especially
among older workers. About a third
of all workers over the age of 51 and
between 41-50 years old said they were
6
https://www.cia.gov/library/publications/the-world-factbook/geos/uk.html
7
Best’s Insurance News, March 7, 2011
2011 STUDY: UNITED KINGDOM 63
“extremely concerned” about rebuilding
their retirement nest egg following the
recent meltdown in world markets. Younger
workers had no such high-level concerns,
given their longer time horizon for savings.
• Compared to four years ago, fewer
workers in the U.K. said they have
achieved or are on track to attaining their
retirement goals. Four percent said they
have achieved their retirement goals, down
1% from 2007 (and compared to 5% of
their American counterparts). Those saying
they were on track dropped nine points to
45%, compared to only one in four U.S.
workers in this category.
Upcoming changes to the government pension
regulations could also spark more concern
among U.K. workers and expose weaknesses in
their retirement planning strategies. Similar to
the trend well under way in the U.S., the U.K.
is moving from a classical pension or de?ned
bene?t system to a de?ned contribution
system.
7
U.K. employees who currently enjoy
a more generous contribution from their
company could lose out in the new regime.
In 2012, the government will introduce a new
“personal accounts” retirement program that
will require a mandatory 3% contribution
from employers, who must automatically
enroll their employees.
But that is not the only or even the
most serious issue. Moving to a de?ned
contribution plan means that the longevity
risk is no longer shouldered by employers
but mostly by employees, who may not
save enough to ensure they do not outlive
their retirement money. Employees also
need to understand that there might be an
income difference between the traditional
de?ned bene?t plan from their employer
and the new de?ned contribution system
that they must actively invest in. This is an
opportunity for bene?ts providers — such as
those offering guaranteed income through
annuities and other products — to offer
workers in the U.K. solutions for gaps in
retirement income. Bene?ts providers and
?nancial companies expect the de?ned
contribution market in the U.K. to boom in
the coming years.
7
NUMBER OF YEARS FULL-TIME EMPLOYEES
PLAN TO SPEND IN RETIREMENT
31+ years
21-30 years
11-20 years
6-10 years
1-5 years 4%
13%
46%
28%
8%
EMPLOYEES TOP FINANCIAL CONCERNS REGARDING RETIREMENT
Having enough money to take care of elderly parents or in-laws
Providing for your own long-term care needs
Rebuilding your retirement savings
following recent financial events
Having to work full-time or part-time
to live comfortably in retirement years
Providing for your spouse’s long-term care needs
Outliving retirement money
34%
52%
33%
N/A
31%
47%
28%
N/A
26%
45%
23%
35%
United Kingdom U.S. Percentages have been rounded to the nearest whole number.
Percentages have been rounded to the nearest whole number.
Financial Planning:
High Degree of Expertise
Raises the Bar
Unlike many of their counterparts in the other
countries in this survey, employees in the U.K.
consider themselves to be ?nancially savvy.
Only one in ?ve admits to being a novice
investor. The fact that workers in the U.K. own
a large number of ?nancial products, most of
these obtained outside the workplace, is proof
of this expertise in personal money matters.
More than half of all of U.K. employees
(51%) feel in control of their ?nances; this is
down seven points from 2007, an apparent
casualty of the recession, but still ahead of
the U.S. at 34%.
Moreover, a full 64% of all workers in the
U.K. consult with ?nancial professionals such
as bankers, insurance agents or certi?ed
?nancial planners. This is up three percent
from 2007, underscoring the desire of
employees in the U.K. to repair the damage
from the ?nancial crisis.
Given the ?nancial expertise of many U.K.
employees, bene?ts specialists will have to devise
innovative strategies to gain their attention and
interest. Employers showed a slight increase
in their willingness to offer general ?nancial
planning services to their employees, though
not for personalized services. But only one in
four workers in the U.K. is even interested in
their employer offering such advice.
Conclusion
The United Kingdom is a wealthy, highly
industrialized country with many of the same
problems confronting its partners in the
European Union as well as the U.S. and Japan.
Namely, the demographic challenge of an aging
workforce, the high cost of social programs
such as retirement pensions and health care,
and the need for austerity in budgeting.
At the same time, the U.K. is a mature
bene?ts market with a working population
that possesses a high degree of sophistication
when it comes to planning for the future and
purchasing products to ensure their ?nancial
BENEFITS OFFERED BY EMPLOYERS WHO PROVIDE BENEFITS
Creditor insurance
Home insurance
Long-term care insurance
Annuities
Dental insurance
Personal accident coverage
Auto insurance
Critical illness insurance
Travel insurance
LTD or permanent health
Life assurance
Private medical (PMI)
Pension 90%
72%
69%
46%
40%
30%
28%
27%
24%
7%
4%
3%
1%
Percentages have been rounded to the nearest whole number.
Bene?ts providers and
?nancial companies expect
the de?ned contribution
market in the U.K. to boom
in the coming years.
2011 STUDY: UNITED KINGDOM 65
security. Culturally, workers in the U.K. are
generally independent, preferring to go
outside the workplace to buy ?nancial services
and products and also seek the expertise of
?nancial planning professionals.
A bene?ts and ?nancial services provider
approaching the U.K. market will need to take
these factors into account to design a strategy
that is geared for the long term.
• There is an Achilles heel in U.K. retirement
planning that can be the basis for a
sophisticated ?nancial discussion. The
majority of U.K. workers are starting to
realize that they might not have suf?cient
funds for their 20+ years in retirement.
Moreover, the coming changes in govern-
ment pension plans and the possibility
that the British have under estimated the
?nancial needs caused by their increasing
longevity could further expose an income
gap that will need to be covered. As
?nancially savvy as they are, U.K. employees
could be in the market for ?nancial
planning and investment information as
they leave the era of company pensions and
enter an era of de?ned contribution plans.
In addition, there could also be growing
interest in the U.K. in guaranteed income
products such as basic or variable annuities.
• Employers seeking to differentiate themselves
and attract the most skilled workers could
broaden their bene?ts offerings to include
more disability insurance as well as private
medical insurance, which is currently a
bene?t reserved for top management. This is
particularly true if companies are cutting back
on their pension plans for retiring workers.
• For the younger working populace in the
U.K., ?nancial education and planning
programs could be of high interest. Offering
them these types of programs could help
employers to achieve their bene?ts goals
of worker retention, higher productivity
and job satisfaction, and at the same time
prepare younger workers for a bigger role
in funding their own retirements.
The second MetLife International Employee
Bene?ts Trends Study was conducted between
November 2010 and February 2011 by GfK
Custom Research, one of the top global market
research consultants. Results were obtained
through face-to-face, telephone and online
interviews. The targeted sample for each country
was designed to appropriately represent the
full-time employee population base. On the
following pages, totals do not always equal
100% due to rounding.
2011 STUDY: METHODOLOGY 67
Methodology
Australia
DEMOGRAPHIC PROFILE OF
THE EMPLOYER SAMPLE:
Interviews were conducted with 258 employers.
Eligible respondents were those dealing with
employee bene?ts or employee policies in companies
with two or more employees.
DEMOGRAPHIC PROFILE OF
THE EMPLOYEE SAMPLE:
A total of 501 interviews were conducted with
full-time employees in companies with two or more
employees.
COMPANY SIZE
2-99 21%
100-999 40%
1,000+ 40%
AGE
21 to 30 11%
31 to 40 27%
41 to 50 33%
51+ 29%
GENDER
Male 43%
Female 57%
INDUSTRY
Heavy Industry 33%
Professional Services 43%
Sales/Trade 20%
Technology/Science 4%
DECISION
Final 10%
A lot of influence 42%
Moderate influence 48%
LOCATION
NSW 41%
Victoria 26%
Queensland 13%
Other locations 20%
COMPANY SIZE
2-99 37%
100-999 27%
1,000+ 37%
AGE
30 or under 32%
31 to 40 28%
41 to 50 22%
51+ 18%
GENDER
Male 54%
Female 46%
EDUCATION
High school or less 21%
Some college 36%
College graduate+ 43%
ANNUAL HOUSEHOLD INCOME
(IN AUSTRALIAN $)
Under $50,000 15%
$50,000-$100,000 48%
More than $100,000 37%
MARITAL STATUS
Married 42%
Single, never married 17%
Domestic partnership 24%
Divorced 7%
Separated 2%
Widowed 1%
CHILDREN
Yes 35%
No 65%
2011 STUDY: METHODOLOGY 69
Brazil
DEMOGRAPHIC PROFILE OF
THE EMPLOYER SAMPLE:
Interviews were conducted with 250 employers
(193 offering bene?ts and 57 not offering bene?ts).
Eligible respondents were those dealing with
employee bene?ts or employee policies in companies
with 50 or more employees.
DEMOGRAPHIC PROFILE OF
THE EMPLOYEE SAMPLE:
A total of 500 interviews were conducted with full-
time employees (351 with bene?ts and 149 without
bene?ts) in companies with 50 or more employees.
COMPANY SIZE
50-99 29%
100-999 56%
1,000+ 15%
AGE
18 to 30 43%
31 to 40 32%
41 to 50 17%
51+ 8%
GENDER
Male 37%
Female 63%
DECISION
Final 7%
A lot of influence 30%
Moderate influence 63%
INDUSTRY
Heavy Industry 23%
Professional Services 47%
Sales/Trade 28%
LOCATION
Sao Paulo 43%
Other locations 57%
COMPANY SIZE
50-99 18%
100-999 44%
1,000+ 38%
AGE
30 or under 44%
31 to 40 27%
41 to 50 17%
51+ 12%
GENDER
Male 57%
Female 43%
LOCATION
Sao Paulo 40%
Other locations 60%
CHILDREN
Yes 44%
No 56%
MARITAL STATUS
Married 58%
Single, never married 34%
Divorced 2%
Separated 3%
Widowed 2%
India
DEMOGRAPHIC PROFILE OF
THE EMPLOYER SAMPLE:
Interviews were conducted with 534 employers
(274 offering bene?ts and 260 not offering bene?ts).
Eligible respondents were those dealing with
employee bene?ts or employee policies in companies
with 100 or more employees.
DEMOGRAPHIC PROFILE OF
THE EMPLOYEE SAMPLE:
A total of 1,090 interviews were conducted with full-time
employees (549 with bene?ts and 541 without bene?ts)
in companies with 100 or more employees.
COMPANY SIZE
100-199 28%
200-499 24%
500-999 20%
1,000+ 28%
DECISION
Final 14%
A lot of influence 28%
Moderate influence 58%
GENDER
Male 90%
Female 10%
INDUSTRY
Services 44%
Heavy Industry 28%
Process Industry 11%
Technology/Science 9%
Sales/Trade 3%
Other 4%
LOCATION
Mumbai 19%
Delhi 21%
Kolkata 14%
Chennai 15%
Bangalore 16%
Ahmedabad 5%
Hyderabad 10%
COMPANY SIZE
100-199 26%
200-499 25%
500-999 20%
1,000+ 29%
AGE
30 or under 32%
31 to 40 35%
41 to 50 23%
51+ 9%
EDUCATION
School up to 5-9 years 4%
SSC/HSC 16%
Some College 6%
Graduate/post graduate (Gen.) 51%
Graduate/post graduate (Prof.) 10%
GENDER
Male 86%
Female 14%
CHILDREN
Yes 54%
No 46%
SAVINGS & INVESTABLE ASSETS
Less than 1 lakh 42%
1 to less than 2.5 lakhs 26%
2.5 to less than 5 lakhs 18%
5 lakhs+ 14%
ANNUAL HOUSEHOLD INCOME (IN RUPEES)
75,000 to less than 1 lakh 23%
1 to less than 2 lakhs 18%
2 to 5 lakhs 12%
6 to 10 lakhs 28%
10 lakhs+ 18%
MARITAL STATUS
Married 72%
Single, never married 28%
LOCATION
Mumbai 26%
Delhi 22%
Kolkata 22%
Chennai 10%
Bangalore 7%
Ahmedabad 5%
Hyderabad 7%
2011 STUDY: METHODOLOGY 71
Mexico
DEMOGRAPHIC PROFILE OF
THE EMPLOYER SAMPLE:
Interviews were conducted with 250 employers
(125 offering bene?ts and 125 not offering bene?ts).
Eligible respondents were those dealing with
employee bene?ts or employee policies in companies
with 50 or more employees.
DEMOGRAPHIC PROFILE OF
THE EMPLOYEE SAMPLE:
A total of 439 interviews were conducted among full-
time employees (223 with bene?ts and 216 without
bene?ts) in companies with 50 or more employees.
COMPANY SIZE
50-99 63%
100-999 26%
1,000+ 10%
AGE
18 to 30 35%
31 to 40 33%
41 to 50 26%
51+ 7%
GENDER
Male 67%
Female 33%
DECISION
Final 28%
A lot of influence 34%
Moderate influence 37%
INDUSTRY
Heavy Industry 36%
Professional Services 25%
Sales/Trade 34%
Technology/Science 6%
LOCATION
Mexico 41%
Guadalajara 20%
Monterrey 20%
Leon 19%
COMPANY SIZE
50-99 39%
100-999 46%
1,000+ 16%
AGE
30 or under 29%
31 to 40 31%
41 to 50 23%
51+ 18%
GENDER
Male 67%
Female 33%
LOCATION
Mexico 35%
Guadalajara 23%
Monterrey 24%
Leon 18%
CHILDREN
Yes 51%
No 49%
MARITAL STATUS
Married 65%
Single, never married 24%
Divorced 5%
Separated 3%
Widowed 3%
SOCIAL CLASS
B, C+ (High) 11%
C (Mid) 40%
D+, D (Low) 49%
United Kingdom
DEMOGRAPHIC PROFILE OF
THE EMPLOYER SAMPLE:
Interviews were conducted with 150 employers
(123 offering bene?ts and 27 not offering bene?ts).
Eligible respondents were those dealing with
employee bene?ts or employee policies in companies
with 10 or more employees.
DEMOGRAPHIC PROFILE OF
THE EMPLOYEE SAMPLE:
A total of 500 interviews were conducted among full-
time employees (317 with bene?ts and 183 without
bene?ts) in companies with 10 or more employees.
INDUSTRY
Heavy Industry 29%
Professional Services 44%
Sales/Trade 20%
Technology/Science 3%
COMPANY SIZE
10-99 55%
100-999 30%
1,000+ 15%
GENDER
Male 41%
Female 59%
DECISION
Final 8%
A lot of influence 48%
Moderate influence 44%
LOCATIONS
North 27%
Midland 19%
South 54%
COMPANY SIZE
10-99 21%
100-999 29%
1,000+ 51%
AGE
30 or under 10%
31 to 40 21%
41 to 50 37%
51+ 32%
ANNUAL HOUSEHOLD INCOME
(IN POUNDS)
£25,000 or less 18%
£25,001-£50,000 50%
£50,001+ 33%
SAVINGS & INVESTABLE ASSETS
Up to £30,000 71%
£30,001+ 30%
GENDER
Male 61%
Female 39%
MARITAL STATUS
Married 65%
Single, never married 15%
Domestic partnership 12%
Divorced 6%
Separated 1%
Widowed 1%
MetLife, Inc. is a leading global provider of
insurance, annuities and employee bene?t programs,
serving 90 million customers in over 60 countries.
Through its subsidiaries and af?liates, MetLife holds
leading market positions in the United States, Japan,
Latin America, Asia Paci?c, Europe and the Middle
East. For more information, visit www.metlife.com.
For additional information, visit us online at:
• Australia: www.metlife.com.au/
• Brazil: www.metlife.com.br/
• India: www.metlife.co.in/
• Mexico: www.metlife.com.mx/
• U.K.: www.metlife.co.uk/
About MetLife
2011 STUDY: METHODOLOGY 73
1900030368
© 2011 METLIFE, INC. L0611187545(exp0812)(All States)
PEANUTS © 2011 Peanuts Worldwide
Metropolitan Life Insurance Company
200 Park Avenue
New York, NY 10166
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