Romeo Msipha, senior consultant at Old Mutual Corporate Consultants, says: "Making it easy for an employee to contribute more towards their retirement savings is one of the best ways an employer can help their employees save more towards their retirement in the most tax-efficient manner."
He has the following advice for employers wanting to help their staff members:
• Assess the current compulsory minimum contribution and the total contribution of employee and employer, then calculate whether this minimum contribution will realistically ensure that most employees save enough to enjoy a comfortable retirement;
• Provide a range of options so that employees can choose different contributions without the process becoming an administrative challenge for the department of human resources;
• Ensure that all employees understand the new, flexible contribution structure and how it allows them to take advantage of the new tax deductions to increase their retirement savings; and
• Make the process a partnership between employees and the business by using simple guidelines on the contribution; issuing reminders about the value of saving more; and giving access to workplace advisers or consultants so that staff can get sound financial advice.