In today’s fast-paced global economy, companies are constantly looking for ways to attract and retain top talent. One increasingly popular strategy, especially in the Middle East, is offering a comprehensive Group Savings Scheme (GSS) from the many available. But what exactly is a GSS, and why are so many employers jumping on board?
Let’s dive in and explore why a GSS could be the upgrade your organisation needs.
Why Group Savings Schemes are Booming in the Middle East
You’ve probably noticed the growing buzz around Group Savings Schemes if you're in the Middle East. And there’s a good reason for it. Offering a GSS is quickly becoming a must-have for companies looking to stand out in the competitive job market. Here’s why:
Attracting Top Talent: In today’s job market, a competitive salary with a selection of possible allowances often isn’t enough to lure the best candidates. Talented professionals are looking for employers who invest in their future. A well-structured GSS sends a powerful message: we care about your long-term financial well-being. This is especially crucial in industries like tech, finance, and engineering, where specialised skills are in high demand.
Enhancing Staff Retention: Once you’ve attracted top talent, keeping them is the next challenge. Employees are more likely to stay with a company that offers financial security and stability. A GSS can be a critical factor in reducing turnover, providing employees a clear path to achieving their financial goals. For expatriates who might not have access to traditional pension schemes and desire more than the conventional gratuity benefit, a GSS can be a vital part of their retirement planning.
Meeting Expatriate Needs: In a region with a high number of expatriates, flexibility and portability are essential. A GSS offers precisely that, allowing employees to continue their savings journey even when they change jobs or relocate. This continuity is invaluable for expatriates who often move across borders and need a reliable way to manage their finances.
What Makes a Group Savings Scheme So Appealing?
Group Savings Schemes offer a host of benefits for both employers and employees. Here’s a closer look at what makes them so appealing:
1. Flexibility and Customisation
One of the biggest draws of a GSS is the flexibility it offers. Employees can tailor their investment portfolios to match their financial goals and risk appetites. With thousands of investment options across various asset classes and currencies, they can create a portfolio that aligns with their unique financial objectives. Whether saving for retirement, education, or short or long-term goals, a GSS provides the flexibility to customise investments to suit individual needs.
2. Multi-Currency Support
Multi-currency support is a significant benefit for employees working in a global environment. Many GSS platforms offer investments in up to 11 currencies, including the US Dollar (USD), Euro (EUR), British Pound (GBP), Swiss Franc (CHF), Canadian Dollar (CAD), Australian Dollar (AUD), New Zealand Dollar (NZD), and South African Rand (ZAR). This feature allows employees to choose the currency that best suits their needs, and they can switch currencies at no extra cost, avoiding often expensive exchange fees. For expatriates earning in one currency but planning to retire in another, this flexibility is invaluable.
3. Portability for a Mobile Workforce
In today’s world, job changes and relocations are common. Fortunately, a GSS is designed to move with employees, offering seamless portability. Employees can maintain their savings plans as they move across different countries, ensuring continuity in their investment strategy. This makes GSS an ideal solution for internationally mobile employees, offering the ability to manage savings from anywhere in the world.
4. No Lock-In Period
Freedom and flexibility are at the core of a GSS. Unlike some investment schemes that tie you down, a GSS typically has no lock-in period. Employees can manage their investments as they see fit without being restricted by a fixed term. If employees leave their current jobs, they can keep their scheme and continue making personal contributions, ensuring their financial planning stays on track regardless of career changes. This freedom empowers employees to make investment decisions that align with their evolving financial goals.
5. Cutting-Edge Online Access
Managing investments has never been easier. With a GSS, employees have 24/7 online access to their portfolios, eliminating the need for paper statements and manual transactions. User-friendly platforms allow employees to monitor their portfolio performance and stay on top of investments to make informed financial decisions with their advisors.
6. Transparent and Competitive Pricing
Nobody likes hidden fees. Fortunately, GSS platforms are known for their transparency and competitive pricing. Employees can expect straightforward pricing models with no hidden charges. A simple ongoing advisory charge is typically based on the portfolio value to align goals. Plus, there are usually no early exit or withdrawal charges, allowing employees to work with their appointed financial advisor to manage their investments without penalty. This transparency ensures employees can focus on growing their savings without worrying about unexpected costs.
7. Dual Contributions from Employer and Employee
One of the standout features of a Group Savings Scheme is the ability for both employees and employers to contribute to the plan. This collaborative approach boosts savings and aligns both parties' interests toward securing a stable financial future for the employee.
Employee Contributions: Employees can choose the percentage of their income they want to contribute to their savings. This flexibility allows employees to adjust their contributions based on their financial situation and goals.
Employer Contributions: Employers can also contribute to the scheme. This contribution can be their own fixed percentage or match the employee's contribution, incentivising employees to participate actively in the scheme.
Example: Let’s say an employee earns $5,000 per month. The employer decides to contribute 5% of the employee’s salary to the GSS from their funds, which amounts to $250 monthly. The employee also contributes 5% of their salary, adding another $250. This means that $500 is added to the employee's monthly savings, effectively doubling the savings compared to the employee's sole contribution.
This dual contribution structure accelerates the growth of the employees' savings and demonstrates the employer's commitment to their financial well-being. It’s a win-win situation that fosters employee engagement and loyalty.
Qualified Financial Advisors for Personalised Guidance
A vital component of a well-managed GSS is the involvement of qualified financial advisors. These professionals provide holistic, one-on-one advice to employees, ensuring their financial needs and goals are addressed through personalised support.
Personalised Financial Planning: Financial advisors work closely with employees to develop tailored financial plans that align with their circumstances, goals, and risk tolerance. By understanding each employee's unique financial situation, advisors can offer tailored advice that helps them achieve their financial objectives.
Ongoing Support and Education: Advisors are available to provide ongoing support, helping employees understand their investment options and make informed decisions. They offer educational resources and tools to enhance employees’ financial literacy and confidence in managing their portfolios. This continuous support ensures that employees have the information and guidance they need to navigate their financial journey successfully.
Tailored Investment Strategies: Financial advisors can help employees design and adjust their investment strategies over time, taking into account changes in personal circumstances, market conditions, and financial goals. This ensures the investment approach remains dynamic and responsive to each employee's evolving needs. Advisors work with employees to create and maintain a diversified investment portfolio that aligns with their risk appetite, religious requirements, and financial objectives.
Risk Management: Advisors assist employees in understanding and managing investment risks, ensuring that their portfolios are diversified and aligned with their risk appetite. This proactive approach to risk management helps safeguard employees’ investments against market volatility. Advisors provide insights and strategies to help employees mitigate risk and make informed investment decisions.
The support of qualified financial advisors ensures that employees receive expert guidance throughout their participation in the scheme, enhancing the overall value and success of the GSS. Advisors help employees make informed decisions and achieve their financial goals by providing personalised advice and support.
Tailored Investment Options and Model Portfolios
GSS platforms offer open architecture access to diverse investment options, from mutual funds to ETFs, and model portfolios managed by leading global fund managers. These portfolios aim to deliver targeted returns based on specific risk profiles and are regularly monitored to optimise performance. Model portfolios provide employees with a diversified investment strategy to achieve their financial objectives while managing risk.
This flexibility allows your advisor and their support team to make any necessary changes to an investment strategy, enabling dynamic portfolio management in response to market changes. An investment strategy can be built from various investment options that align with their financial goals and risk tolerance.
Security and Compliance
Security and compliance are top priorities for GSS platforms. Employee assets are typically held via a nominee company, ensuring complete segregation of client money from the platform’s assets. This setup provides an additional layer of security, protecting investments from potential creditor claims in the unlikely event of platform insolvency.
Most platforms undergo regular audits and comply with stringent reporting requirements set by financial authorities, ensuring transparency and reliability. By maintaining strict security and compliance standards, GSS platforms offer employees peace of mind and confidence in their investments.
Why Choose a Group Savings Scheme?
With a strong regulatory framework and robust security measures, GSS platforms offer peace of mind for both employers and employees. They combine flexibility, security, and innovative features, making them an attractive option for organisations looking to provide a comprehensive retirement savings solution.
Act Now: Empower Your Workforce with a Group Savings Scheme
Offering a Group Savings Scheme is a progressive move for any employer looking to attract and retain top talent. They ensure that employees have the necessary tools to achieve their financial goals while offering employers a competitive edge in talent retention and satisfaction.
Whether you're focused on your employees' retirement planning or more general wealth accumulation, a Group Savings Scheme offers a practical, globally recognised solution.
Message us today to learn how a GSS can benefit your organisation. Let's understand your unique requirements and preferences, and then I will provide a tailored recommendation that aligns with your goals and ensures your employees are set up for financial success.
Don’t miss out on this opportunity to enhance your employee benefits package.
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