Introduction
Discussions are increasingly taking shape on the imperativeness of pension and benefit plans and how organizations can take advantage of the innovative pension plans that are being introduced in most settings. The discussions are set to foster understanding among various stakeholders especially employers on the need to subscribe their members to pension schemes. Indeed, pension schemes are credible retirement plans that are sponsored by employers in most institutions. The plans are vital since they enable employees to retire honorably. They also enable employees to benefit from the economic advantages that are realized due to low costs obligations required. Similarly, pension plans enable employers to benefit financially since they are accorded the opportunity to execute various investment plans with the resources that are remitted to the retirement schemes.
Despite the nobleness of pension schemes in various institutions, most companies are currently reluctant on taking up the opportunities provided by the scheme providers. The companies are reluctant due to the evident challenges that they face in the sector. The challenge that requires proper re-organization ranges from social, economic and legal obligations are making pension plans very expensive. Particularly, they have made most managers to find retirement plans non-attractive (Rodrigez, 2012, p, i).
They cite that they are not bound to benefit much from the schemes if the stringent measures or requirements are still in place. According to recent developments the challenges that threaten to impede subscription to pension schemes in various nations are fueled by variances in demand and legislation obligations. They are also fueled by financial complications such as the evident financial crisis of 1998 that posed immense threats to the welfare of pension schemes. To ensure that companies do not pull out of pension schemes, authorities and key stakeholders in the financial sector have been undertaking high profile deliberations to formulate conventional or innovative pension schemes.
The stakeholders are keen in developing quality, sustainable and innovative pension scheme strategies to ensure improved terms of engagement. This is essential in giving employers the opportunity to find the schemes viable and beneficial. It is also meant to enable them explore the fundamentals of asset allocation and pension investment that are essential in advancing performance. The basic innovative strategies include holistic transformation of decision-making, introduction of pension buyout and fiduciary administration of pension schemes.
Indeed, the innovative strategies are bound to facilitate growth in the sector by creating favorable terms of engagement between pension service providers and employers (Cohen & FitzGerald, 2007, p, 49). Therefore, institutions should re-organize their activities by developing viable modalities to enable them benefit from the innovative pension strategies. In particular, they should create favorable environment for innovation and ensure absolute formalization of innovation processes in their settings. They should also improve management style, knowledge management and utilization of resources. Thus, this paper focuses on how organizations can organize themselves to be able to take advantage of the innovative pension schemes that are being introduced.
Purpose and relevance of the study
This study was conducted purposely to provide credible information on how institutions can organize themselves to take advantage of the innovations that are beings introduced to foster management of pension schemes. It was also conducted with the purpose to facilitate in-depth understanding about various innovative pension schemes and how they are bound to benefit both employers and employees. Similarly, the study is bound to enable managers in various institutions to establish the need to re-organize themselves and adopt viable management practices to enable them benefit from pension schemes.
Research objectives
- To investigate the imperativeness of pension schemes and benefits to both employers and employees
- To explore how companies both existing and new can take advantage of the innovative pension schemes
- To identify and explore major innovative techniques of pension schemes
- To establish the significance of innovative pension schemes and how they would social integration in UAE
- To establish key performance strategies that organizations should adopt to enable the benefit from the innovative pension schemes.
Research methodology and data analysis techniques
This study adopted exploratory research method due to its relevance in driving studies of such nature. The method enabled the researcher to execute extensive research on the topic and draw reliable findings. The technique provided the researcher with the requisite incentives that facilitated execution of all research activities from the initial stages. In particular, it enabled the researcher to plan well on how to perform data gathering activities and how to utilize resources. Similarly, it enabled the researcher to select appropriate data collection and analysis techniques. The techniques that included the use of interviews as a primary source and documentary works facilitate the realization of in-depth and factual information.
This ensured that the findings that were realized were factual and reliable. The research technique was also reliable since it gave the researcher clear guidelines on how to chose sample size and sampling techniques based on his judgetm.ent on their appropriateness. In this regarded, the researcher decided to include a sample of 30 respondents who included 10 employees, 10 employers and 10 pension scheme managers. The respondents were randomly selected based on the researcher’s judgment on their suitability and capacity to provide appropriate information. Consequently, various electronic publications were also used to facilitate data gathering.
Literature review
This section provides comprehensive information pertaining to pension schemes and benefit plans. It focuses on facilitating in-depth understanding on key aspects of innovative pension schemes, their benefits, and relevance including how organizations can utilize the plans to their advantage. The section covers a discussion the significance of pension schemes, how companies can organize themselves to take advantage of innovative pension plans and key innovative pension schemes. Further, it covers the relevance of pension schemes in various institutions especially in the contemporary society.
Innovative pension schemes, strategies, and their importance
Indeed, pension schemes are noble plans that enable employees to retire with honor and dignity. They are relevant in any setting since they offer financial security even after retirement. The plans also make it easy for companies to attract and retain best employees with high level of proficiency. However, poor operations of the schemes and the escalating charges that members are required to remit monthly are threatening to drive most members away. Due to this, the innovative scheme that is to be adopted is set to replace the public scheme that has failed to provide credible services to the public (Fitoussi, 2010, p, 5). The new scheme is known as simplified pension plan. The scheme is designed to provide clear-cut solutions to various issues that are driving away employers. It is also meant to enhance efficiency and effectiveness in service delivery. Firstly, simplified pension plan is a scheme that will ensure that benefits that members are to get are defined as compared to public plans where only remittances were defined.
It will provide clear ways in which both remittances and benefits are calculated to enhance transparency. This will enable employees to know exact amount that they are bound to get. Secondly, the scheme is designed with pertinent incentives to foster pension buyout. It will also transform decision making on key issues that affects financial remittances and payment. Further, the scheme as designed will provide low cost services since it is set with requisite safeguards that will enable institutions to provide services even during volatile situations (Fitoussi, 2010, p, 5). Consequently, key stakeholders have also developed three innovative governance strategies to ensure that the schemes operate well and that they provide customized services. The innovative governance techniques include the transformation of decision-making, effective management of pension buyout and fiduciary management of emerging issues. These innovations are essential since they hold the capacity to revolutionize service delivery in the pension sector. Therefore, companies should re-consider their decisions and register their members to various pension schemes.
How companies should organize themselves to take advantage of innovative pension schemes
Indeed, the innovative pension scheme that has been developed after extensive study of challenges that ails the sector seeks to provide superior solutions to the evident issues. Therefore, companies that aspire to give their employees the best discretionary benefits to enable them live honorably should register their employees in the schemes. The institutions should put in place necessary measures to ensure that they benefit from the innovative pension plan (Rodrigez, 2012, p, i). As noted by scholars, companies or employers should view pension schemes with open mind especially with the introduction of new plan and governance strategies.
Particularly, they should organize themselves by ensuring proper management of key factors that normally affect their ability to manage innovation. Firstly, both employers companies that provide pension services should improve on their management styles to boost coordination. They should adopt democratic management styles that promote participation of other stakeholders in decision making and understanding. They should also ensure comprehensive formalization of the innovative processes to enable them remain relevant.
Companies must also organize themselves to take advantage of the benefits of innovation by creating a favorable environment for innovation. That is they should be able to accept and embrace innovative techniques or strategies and they should view them positively. This would enable them find it easy to define themselves with the innovative ideals. Similarly, managers in various intuitions should re-organize their management attitude and view the innovation with at most positivity (Rodrigez, 2012, p, i).
They should align their leadership and management decisions with new developments to enable them enjoy the benefits that environmental changes bring. Further, they should re-organize themselves by putting in place adequate resources to facilitate consistent remittances to the schemes. They should do this since they are bound to receive enormous benefits under the new scheme compared to the last one. Consequently, they should acquire basic knowledge on how pension returns and remittances are being calculated for them to know whether they are making loses or not. These preparations are important in ensuring that companies do not lose out from benefiting from the pension plans (Holzmann, 2009, p, 45).
Data analysis
This section gives holistic analysis of the data collected through interviews and from various academic documents over a period of 14 days. Indeed, data analysis was successful since all the respondents and selected documented publications provided reliable information. It was also successful since all the issues that the researcher was seeking to find out from the respondents were all answered. That is the respondents provided the researcher with reliable answers to the questions that he posed to them. Response rate was also good since all the respondents who were sampled to facilitate the study gave timely response. This was evident since the response rate among those were interviewed who comprised of 10 managers from pension companies, 10 employees and 10 employers was 100%. Similarly, the publications or electronic resources also provided positive results. Key questions that were presented to the respondents included.
- What are the things organizations should do to take advantage of the innovative pension scheme?
- What are your feelings about the introduction of innovative pension scheme and governance strategies?
- Do you think the innovative pension scheme will make more employers to change their perception about pension schemes?
- Do you think pension schemes are important especially in the contemporary society?
Table showing response rate
Stakeholder’s feelings about the introduction of innovative pension scheme and governance strategies
On this question, all employees were happy about the introduction of the innovative pension scheme. Their joy was informed by the fact that they would now be registered to the schemes and that their future would be secure. They were also happy because the innovation was proving to be a major step towards finding a lasting solution to the ailing pension sector. They asserted that the innovation has come at the right time when their employers were withdrawing their membership from the schemes due to various complications including financial crisis (Russell, 2007, p, 3). They noted that the introduction of the innovative scheme should enable their employers to find a reason of registering them again in the schemes. Conversely, employers were skeptical about the innovation. They were questioning its timing, its capacity to revolutionize the operations in the sector, its sustainability and ability to foster efficiency in the sector. 50% of the employers who were polled supported the innovation citing that it would help in transforming the sector. However, the other 50% of employers were skeptical based on the highlighted grounds.
Things organizations should do to take advantage of the innovative pension scheme
This question attracted mixed and interesting reactions from the respondents. This was evident since various individuals had their own perspective when this question was posed. Some respondents cited that organizations should re-organize themselves and prepare adequately by streamlining their policies including structure of operation to enable them benefit from the new scheme. However, others had a feeling that pension scheme providers had failed to deliver cost effective services and that employers should register their workers into alternative schemes. Clearly, all the respondents presented their opinion on this matter and they stated that employers must consider changing their attitude and negative perception they have against pension scheme providers. This is essential for them to benefit from the innovation. Majority of employees cited that the innovation is promising and that employers or companies should strive to allocate resources towards this venture.
Variably, pension scheme managers cited that organizations or employers have a duty to manage their employees well. They should ensure that they keep their data pertaining to age, work experience and salary scale well since such information are important for scheme providers (Russell, 2007, p, 3). This is evident since the scheme providers use such information as parameters for determining remittances and payments. Therefore, for employers especially in UAE to benefit holistically from the scheme they must manage and present employees data to scheme providers promptly. Secondly, they noted that employers should adopt conventional financial management systems to enable them maximize on their available resources to avoid rampant defaults in making remittances. This makes them to incur some costs that are not warranted and then they complain. In this regard, they should allocate adequate resources for registering and sustaining their members in the schemes.
Discussion on whether the innovative pension scheme will make more employers to change their perception about pension schemes
On this question, 100% of employees were optimistic that the innovative scheme will enable their employers to view pension schemes differently. They noted that the plans are very important for their welfare. However, 50% gave dissenting opinions citing that they would not rush into restoring their membership or registering their members into the schemes just because an innovative plan is in place. They were skeptical about the innovation and noted that they will give it time. On the other hand, 50% of them reported that they would try it since pension schemes are important for them and employees. On there response, 100% of scheme managers only advised employers to take up the opportunity that the innovation holds the capacity to revolutionize operations in the sector.
The importance of pension schemes especially in the contemporary society
On the question that sought to establish whether pension schemes are of great relevance and significant in the contemporary society, most respondents cited yes. The respondents stated that pension schemes remain important since they guarantee individuals financial security especially after retirement. 93% of the respondents affirmed that pension schemes are very instrumental in any setting to both employees and employers as opposed to 7% of the respondents who had reservations about the effectiveness of the schemes. Among those who supported the idea, 10 that represent 100% of employees who were sampled noted that the schemes are very important. They stated that the schemes are essential to them because they seek; to guarantee their future (Rodrigez, 2012, p, i). The schemes hold the capacity to ensure that they retire honorably. Similarly, the schemes remain part of the fringe benefits that employers should give them. Therefore, they feel that employers should ensure that they are registered in various pension schemes to enable them be financially stable after retirement.
Conversely, all managers of various pension schemes in UAE who were sampled noted that pension plans gives credible retirement plans or support that are vital for both employers and employees/. They stated that the schemes benefit both stakeholders and they are essential especially in the current environment where financial issues are rising day by day. The managers indicated that no organization should fail to take the opportunity that the new and innovative pension plan is to present.
This is because no organization can satisfy its workers appropriately if they are not secure financially. Consequently, only 70% of the employers agreed that pension schemes were important despite their reservations. They noted that the schemes benefits both employers and employees based on the benefits that are received. However, 30% of the employers were of the opinion that pension were becoming so expensive and unsustainable. They noted that the innovation that is talked about will solve much since it is he same industry. The employers preferred to develop their own internal schemes and enroll members to ensure that their future is secure as opposed to taking the schemes.
Data from electronic sources
Holzmann (2009, p, 45) who is a renowned scholar provided credible information pertaining to the imperativeness of pension schemes to both employers and employees. He focused on the benefits of pension schemes and reasons why employers should consider registering their employees in the schemes. Further, the author discussed key factors that have been affecting superior service delivery by various scheme providers. Holzmann noted that the innovative pension scheme that is being introduced is bound to improve flexibility in the sector by ensuring that the concerns that most employers have been raising are solved amicably. In this regard, he cited that employers should consider re-organizing themselves through adoption of conventional management approaches to enable them benefit from the innovative pension scheme that is being introduced. Firstly, he noted that employers must realign their policies and operating structures to enable them join register their employees in the scheme.
Secondly, employers should change their attitude and perception towards pension schemes and consider giving the innovation a chance. Thirdly, he cited that managers should adopt the use of technology to facilitate their interaction with pension scheme providers. This is important since enhancing effectiveness in the sector requires consistent interaction and sharing of ides. Further, employers should seek more knowledge on how pension schemes are managed to enable them have deeper understanding on how they work (Holzmann, 2009, p, 45). These aspects are significance in ensuring that employers receive at most benefits from the innovative pension scheme. Therefore, employees should not hesitate from taking up the opportunity that the simplified pension plan is bound to present.
According to Cohen & FitzGerald (2007, p, 49), pension scheme is an important retirement plan for both employers and employees that should not be neglected. Employers should ensure that their employees are registered in various schemes to enable honorably. The authors focused on the benefits of pension schemes. They also focused on how organizations should re-organize themselves towards taking up, the opportunities that the innovations are bound to present, noting that employers should not miss the chance. They should put up proper measures to ensure that they receive the best out of the innovation. In their book, they cited that employers should adopt effective management styles, change their attitude towards pension schemes, manage data relating to their employees age, working experience and salary scale effective and ensure that they mobilize enough resources to facilitate consistent remittances.
Findings/Conclusion
From the information provided, it is clear that pension scheme and benefit plans are instrumental to both to employers and employees. They are also valued in various settings including UAE despite the evident challenges that they have faced in the sector. The significance of the pension plans is evident since they enable employees to have peace of mind due to financial security that pension arrangements presents. The schemes also enable them to retire with substantial resources that can sustain their lifestyle. Employers also benefit from the schemes since they normally experience low employee turnovers that facilitate consistency in their operations. It was also evident from the data obtained that most individuals are in support of the innovated scheme, they noted that the scheme hold the capacity to revolutionize operations in the sector since it aims at enhancing accountability and transparency. Therefore, employers should not miss out from taking up the opportunity that the innovative program seeks to provide. They should only re-organize themselves and adopt convention practices to enable them embrace the innovation and benefit from it fully.
Recommendations
Based on the notable significance of pension schemes, it is highly recommended that employers should find it necessary to register their employees. Firstly, employers should change their attitude towards pension scheme providers for them to record optimal benefits. Secondly, they should acquire basic knowledge on the schemes operate to enhance their understanding on how remittances and benefits are calculated. Thirdly, they should make requisite financial arrangements t[o enable them make continuous remittances to the schemes. This is essential to enable them avoid incurring penalties that are normally imposed when delay in payment occurs. Further, employers should consider changing their management styles by adopting convention administration practices.
List of References
Cohen, B, & FitzGerald, B, 2007, The Pension Puzzle: Your Complete Guide to Government Benefits, RRSPs, and Employer Plans. Wiley & Sons, Mississauga.
Fitoussi, P, 2010, After the crisis: The Way Ahead, LUISS Univ. Press, Roma.
Holzmann, R, 2009, Aging Population, Pension Funds, and Financial Markets: Regional Perspectives and Global Challenges for Central, Eastern, and Southern Europe ,World Bank, Washington, DC.
Rodrigez, S, 2012, Abu Dhabi Retirement Pensions & Benefits Fund invests in UAE local listed shares, Web.
Russell, L, 2007, Innovative Ways to Save Your Company Thousands and Reduce Costs: A Complete Guide to Creative Cost Cutting and Profit Boosting, Atlantic Pub. Group, Ocala.