Women are lagging in retirement savings and are debilitated by stress

In a recent study of their client base, Momentum Corporate revealed that almost half (41%) of the employees on the FundsAtWork Umbrella Funds are women. With an almost 50/50 gender split across the client base, a one-size-fits-all approach to advice on employee benefits simply won’t cut it.

This is according to Shaeera Essop, Strategic Client Engagement Manager at Momentum Corporate, who says that employers should consider the balance of men and women making up the employee base, the unique challenges they face as well as the industries that they work in.

“When assessing which employee benefits are right for a specific company, it is important to understand the balance of men and women making up the employee base, the unique challenges they face as well as the industries that they work in order to build an effective employee benefit proposition that will not only retain key female talent but help to build a financial future that is right for them,” says Essop.

Female-dominated creative and caring roles demand their place in the sun

There are certain industries where women make up most of the employee base – and this needs to be factored into the employee benefits packages these businesses provide, says Essop. Momentum Corporate’s research showed that employees working in Social Services are 95% female and 73% in Health & Welfare.

“What COVID-19 has brought to the fore, is just how important what a recent PWC study referred to as ‘creative and caring roles’ are in society. Generally speaking, female-dominated roles like nursing, childcare and teaching have been traditionally undervalued in terms of remuneration, yet these are critical for society to function effectively – and during the pandemic have been among the jobs most exposed to the virus,” says Essop. “The remuneration and employee benefits packages offered by employers for these roles will need to reflect this.”

Most working women are millennials

Momentum Corporate numbers show that Millennials make up over half of all women on the FundsAtWork Umbrella Funds. Millennials, or Generation Y, is defined as anyone born is defined as anyone born between 1980 and 1996, which is arguably the largest chunk of working professionals in any market.

“Millennials, and female millennials specifically, may have different views on employee benefits to other generations. In addition to this, they have more time to save and – generally speaking – would have youth and health on their side, so this needs to be factored into investment choices, medical aid options and rewards programmes for female employees,” says Essop.

Ability to retire is a concern and the added stress impacts work productivity

Women have been particularly hard hit by the lockdown because of the industries many of them work in. During the COVID-19 lockdowns, Momentum Corporate’s research showed that around 40% of employees who were placed on temporary absence without pay, had their retirement savings contributions temporarily postponed or their pensionable salaries reduced by their employers, are women. Yet, Momentum Corporate’s data as at June 2020 also shows that only 7% of women make additional voluntary contributions to their group retirement savings to make up for lost contributions.

Essop adds that Momentum Corporate’s research on their client base revealed that out of all the female members in their retirement fund FundsAtWork, 88% are in the danger zone with an average retirement replacement ratio of 21%. “This means almost all female members would receive around only 20% of their current salary in retirement. When we start to look at things like longevity – and that women generally outlive men – the risk of female employees one day outlasting their money is a reality,” says Essop.

She adds that financial stress as a result of this has been shown to have significant impacts on employee productivity and employers should take steps to assist where they can.

Cancer and mental health are the top disability concerns for women

At Momentum Corporate, the top five causes of female disability include cancer (22%), neurological (14%), psychiatric (14%), medical issues (11%), and acute musculoskeletal (8%). Essop says it is interesting to note that women claim disability twice as much as men for cancer-related claims. This is due to the increased prevalence of breast cancer in women.

As the stresses of the current COVID-19 context shine a much-needed light on the importance of mental health, Essop says 14% of female disability claims related to mental health. “The worst part is that this statistic is almost three times greater than psychiatric claims made by men. It’s abundantly clear that too many women are feeling stressed to the point where they can no longer perform their job and are put on permanent or long-term disability,” says Essop.

Echoing this trend, Momentum Corporate’s income replacement claim statistics indicate that most claims by women occurred between the ages of 40 and 49 and related to mental illnesses such as major depression and anxiety.

“This has a significant impact on business productivity and illustrates the great need for employers to ensure female employees have adequate cover with a provider that takes steps to help prevent disability claims before they occur.”

The power of statistical analysis is key – especially when cost cutting

While the pressures on employers to cut costs will likely only increase as the effects of an extended lockdown start to unfold, it’s crucial that every effort is made to keep cover in place to protect both female and male employees on their journey to success.

“Working with an insurer that uses data-driven insights to provide adequate savings solutions as well as adapt cover levels for different types of businesses, industries and members is key to getting value in terms of the right cover in the right places,” says Essop.

She concludes that employers should also ensure that their employee benefits provider guides them in terms of offering ongoing employee education programmes and access to advice through their scheme’s benefit counsellors. “Employers who want to do more for their female employees can speak to their group scheme’s financial adviser for tailored employee benefit and value proposition options available to them.”

Visit the official COVID-19 government website to stay informed: sacoronavirus.co.za