In our conversations with employers, we notice that they often continue to postpone arranging pensions. It is understandable that arranging a pension may not be your first priority. As an entrepreneur, you already have enough on your mind. But what if we told you that it is much simpler and more affordable than you think? In this blog, we discuss the 3 myths that cause employers to keep postponing arranging a pension and show how easy it is to start with a pension.
Which of the following postponement 'excuses' sound familiar to you?
“Yes, we definitely want to arrange a pension when we have had the next fundraising round.”
“Our team is not yet big enough to arrange a pension.”
“We are very busy now because we are in a growth phase, once we are out of this, we can think about a pension.”
These are all very understandable and well-thought-out reasons for postponing a pension. That is why we hear them so often. You are not the only one! It is just a shame that these reasons for postponement are based on the myths that it is expensive, complicated, and takes a lot of time. But the opposite is true. Arranging a pension actually provides you with a high ROI: it costs little time and money for what you get in return and you bind employees to the organisation. Not unimportant as a start-up or scale-up. A pension is an important employment condition that helps you attract and retain talent. Moreover, you help your employees plan for their future.
Let's take a look at the myths that exist about pensions.
In the collective consciousness, a pension is a bit like an iceberg in the water. You know it is there because you see the tip, which is a representation of the concept of a pension. But you have no idea how it works because around 80% of the iceberg is below the water's surface. So, of course, you prefer to postpone arranging a pension until you finally land that one big client. Because finding out how big the iceberg is below the surface takes a lot of effort and is quite complicated. You simply do not dive into the ice-cold water unprepared. But a pension is a lot less complicated than you think. It is just that pension funds have traditionally not been very transparent. And professional terms such as funding ratio, available space, and pension pillars do not make it much clearer either (and our government website does not always help with that). We want to change this at Vive, which is why we write blogs like this one about the pension pillars.
News about pensions, whether it concerns negotiations (e.g. collective labour agreement negotiations) or reaching an agreement, always have one thing in common: long lead times.
Take the Pension Agreement, for example. This was reached in June 2019 after trade unions, employers and the government had negotiated for 10! years. Working out that agreement in the Future Pensions Act took another 4 years. And then we have not even talked about setting up the pension itself. In addition, it also takes a very long time for most traditional pension providers to set up a pension for your employees. This is often accompanied by the drafting of entire volumes of regulations and a host of pension advisors. It is therefore logical that the myth that setting up a pension takes a lot of time has arisen.
But, this does not have to be the case. With us, arranging a pension is not a lengthy, bureaucratic process. Within one working day, you can have a fully functioning pension scheme, without it costing you valuable time or energy. All you have to do is fill in a few details, sit down with us once, and then we do the rest. You can find more information about this in our blog about onboarding at Vive.
Okay, let's be honest, because you're not crazy! This myth is based on a historical fact. The traditional pension was and is expensive. What makes it expensive, among other things, are the pension intermediaries who profit from myths 1 and 2 (and not to forget the administrative hassle). But a pension really does not have to be expensive. You can start a pension scheme for just a few euros per month. In addition, there are flexible options that allow you to scale up or down whenever you want. So you do not have to wait for the next big client or fundraising—you can start right away without putting a huge strain on your budget.
When employers hear from us that you can arrange a pension within a day for about 6 euros per employee per month, they are initially surprised and amazed. “Wow, I seriously did not know it was that easy,” we hear regularly. But also: “This sounds too good to be true.” This indicates how strongly the myths are engraved in our collective consciousness. We simply do not believe that a pension can be easy, flexible, transparent, and cheap. And yet it is true. So you do not have to postpone it until the next fundraising round or until you are in calmer waters. And even if your employees are not asking for it yet, it is good to have it arranged, so you can include it in your job advertisements. In addition, you make your people truly happy with it. So do not postpone arranging a pension any longer!