Aon Employee Preference Survey results on Financial Wellness with 14400 participants from 15+ organisations , 8+ Industry Sectors ,10+ Demographics

1. Aon Hewitt
Retirement and Investment
Employee Financial Wellness
Employee Pulse Survey and Strategies
Aon Hewitt Consulting
June, 2017

2. Aon Hewitt
Retirement and Investment 2
Changing Face of Retirement in India
• India is projected to be the most populous country in 2025,
surpassing China
• While 65% of the population is below age 35, the share of retiree
population (age 60 and above) is expected to climb from 8% in
2010 to 19% (323 million) in 2050, according to UN projections
• The government of India has put the responsibility of retirement
savings and adequacy on the employer and the employee.
• Estimates suggest India’s Pension Assets approx. 10% of GDP as
compared to 50%+ for developed countries
• Over the last few years, savings ratios have also been falling in
India.
Projected share of India’s elderly
population

3. Aon Hewitt
Retirement and Investment 3
Elements of Total Wellbeing
Financial Wellness is a key component of
Employee Wellbeing

4. Aon Hewitt
Retirement and Investment 4
Employer Sponsored Retirement Plans
Statutory/ Mandatory Programs
Employees Provident
Fund Organization (EPFO)
Voluntary Programs
Superannuation
Insurance
Company
provides
Fund
Management
Privately
Managed
Trust
Traditional ULIPs
Governed
by Regional
Provident
Fund
Commissioner
Observations:
NPS is fast gaining popularity at the expense of
Superannuation
Nominated
Fund
Managers
NPS for Corporate
Observations:
It is typical to observe both Gratuity and Provident Fund
being withdrawn during active service life leading to a
risk of retirement savings inadequacy
Option to
outsource
administration
Exempt
Privately
Managed
Trust
Gratuity
Insurance
Company
provides
Fund
Management
Traditional ULIPs
Privately
Managed
Trust

5. Aon Hewitt
Retirement and Investment 5
Financial Stress Impacts Productivity
49% of employees spend
2-3 hours per week at work
dealing with personal
financial issues
Source: Purchasing Power whitepaper Financial Wellness: Power Behind the Purchase, July 2013
Other ways financial stress impacts productivity:
Absenteeism –
More sick leave among the
financially stressed
Work Conflicts –
Incomplete work tasks, accidents
and tardiness
Health Concerns –
52% report financial matters
contribute to irritability, anger,
fatigue and sleeplessness
Lack of Commitment –
Financially stressed workers are
unsatisfied with their pay leading to
lack of pride in job and negative
feelings about their employer
Assuming a 40 hour work, this
means 1 to 2% of payroll is
spent on workers handling
their personal finances

6. Aon Hewitt
Retirement and Investment 6
Financial Wellbeing - What Employees say they Need
Top Help Requests
Save for retirement/long-term needs 91%
Establish an emergency fund 49%
Save for children’s education 49%
Pay off all or a portion of student loans
or refinance at lower rates
47%
Save for retirement/long-term needs 91%
Establish an emergency fund 49%
Save for children’s education 49%
Pay off all or a portion of student loans
or refinance at lower rates
47%
49%spend time at work on
their personal finances
= 1-2%of payroll
Source: Aon Hewitt, 2016 Financial Mindset® Study

7. Aon Hewitt
Retirement and Investment 7
Why Retirement Savings is becoming the foremost
concern for employees and their employers?
.
Source : Aon Hewitt PRR Study
Pay Replacement Ratio (PRR) is the
amount of monthly income at age 60
as a percentage of the last drawn
monthly salary.
An ideal Post Retirement Pay
replacement ratio is 70% - 75%
In India, it is the responsibility of the
individual employee to manage his
retirement savings with support from
his employer sponsored plans and his
savings.
6%
5%
4%
3%
15%
14%
12%
10%
25%
19%
14%
11%
28%
25%
21%
18%
0%
5%
10%
15%
20%
25%
30%
25 30 35 40
PayReplacementRatio
Age at entry
Potential Post Retirement Pay Replacement Ratio
Gratuity
Superannuation
NPS
PF

8. Aon Hewitt
Retirement and Investment
The Survey & Insights

9. Aon Hewitt
Retirement and Investment 9
Aon Employee Preference Study-
Employee Demographics
Source: Aon Hewitt Employee Preference Study 2016-17

10. Aon Hewitt
Retirement and Investment 10
About The Survey
22%
78%
Gender
Female
Male
9%
25%
50%
14%
2% Age(In Years)
18-25
26-30
31-40
41-50
>50
26%
73%
1%
0%
Marital Status
Single
Married
Divorced
Separated
• 78% of the respondents are males
• 50% of the respondents are between the age of 31
Years and 40 Years
• 73% of the respondents are married.
• 57% of the respondents are graduates
• 46% of the respondents are from Tier 1 cities
0%
57%
42%
0% 1%
Educational Qualification
School
Graduation
MBA/Masters
PhD
Others
46%
30%
24%
Cities
Tier 1
Tier 2
Tier 3

11. Aon Hewitt
Retirement and Investment 11
About The Survey
3%
7%
13%
24%
45%
8%
Work Experience
<1 Year
1-2 Years
3-5 Years
6-9 Years
10-20 Years
>20 Years
21%
28%
46%
5%
Management Level
Staff
Junior Management
Middle Management
Top/Senior
Management
4%
41%
34%
18%
3% 0%
Annual Income
<INR 3 Lakhs
INR 3 Lakhs - 10 Lakhs
INR 10 Lakhs - INR 20
Lakhs
INR 20 Lakhs - INR 40
Lakhs
INR 40 Lakhs - INR 80
Lakhs
• 45% of the respondents have a work experience
between 10 years to 20 years
• 46% of the respondents are from the middle
management
• 75% of the respondents have an annual income
between INR 3 Lakhs and INR 20 Lakhs

12. Aon Hewitt
Retirement and Investment 12
What Employees Think
Tax Savings is a major factor
when considering retirement
programs
How prepared are we?
understanding the employee
perspective is more vital than ever
when developing effective programs
Increasing Participation in
Voluntary retirement programs
Shift in how employees approach
their retirement programs
I would like my employer to
organize financial wellness
programs regularly
I am Young and I have other
priorities than saving for
retirement The Government Mandated
programs are not sufficient to take
care of my retirement needs
I need more guidance from my
employer to decide on other
retirement programs

13. Aon Hewitt
Retirement and Investment 13
How concerned are the employees on retirement
savings ?
 Around 57% of the
employees are concerned
that aren’t saving enough
for Retirement.
 Similar trend across
gender, marital status,
location , Education
Qualification and Level of
Management.
39.6% 17.0% 21.5% 21.9%
Strongly Disagree/Disagree Slightly Disagree Slightly Agree Strongly Agree/Agree
“I am not concerned about retirement as I am saving enough
towards it”

14. Aon Hewitt
Retirement and Investment 14
Retirement Savings Concern
Consistent across all factors
Equal number of
Both Male and
Female employees
stated that they are
concened about
insufficient
retirement savings
57%
Married
Employees
concerned about
their retirement
compared to 50%
of the unmarried
employees
59%
Of the Respondents
with work
experience of 10-
20 years work
experience were
concerned about
their savings .
62%
60% Respondents in
age group 31-40
years were
concerned
compared to a 45%
in age group > 50
and between 18-25
years
60%
Source: Aon Hewitt Employee Preference Study 2016-17

15. Aon Hewitt
Retirement and Investment 15
Retirement Savings Concern
Consistent across all factors
Of repondents with
Dependants and
Children
concerned about
the retirement
savings
59%
Of employees with
an Income above
80 Lakhs were
concerned about
their
62%
Of respondents
living in tier 1 cities
were more
concerned vs 52%
in living in tier 3
cities
59%
The Concern for
retirement savings is
consistent across all
levels of
Management
57%
Source: Aon Hewitt Employee Preference Study 2016-17

16. Aon Hewitt
Retirement and Investment 16
What is the desired Pay Replacement Ratio (PRR)
90% - 100%
75% - 90%
50% - 75%
Below 50%
- 15%
- 28%
- 19%
- 12%
- 26%
Above 100%
Though 70% is considered to be an ideal PRR,
however 60% of the respondents felt that
75% and above is a desired PRR
53% of employees in age group 18 – 25 years
felt the PRR should be above 90% when
compared to 22% of employees above 50
years
Employees with work experience of less than 1
year want a higher PRR when compared to
employees with more years of work experience
Employees with Lower annual income desire a
higher PRR when compared to employees with
higher annual income

17. Aon Hewitt
Retirement and Investment 17
What is the ideal Pay Replacement Ratio
Source: Aon Hewitt Employee Preference Study 2016-17
Above 100%
90% - 100%
75% - 90%
50% - 75%
Below 50%
Overall Male Female Married Single 18-25 25-30 31-40 41-50 > 50
26%
15%
19%
29%
12%
27%
15%
19%
28%
12%
23%
15%
21%
29%
12%
23%
15%
19%
31%
12%
35%
14%
18%
21%
13%
39%
14%
14%
21%
12%
32%
15%
18%
21%
13%
24%
15%
19%
30%
12%
18%
14%
23%
36%
9%
10%
12%
21%
37%
21%
• Unmarried employees desire a higher pay replacement ratio when compared to married employees
• Younger employees expect a much higher pay replacement ratio when compared to the older employees may be
due to current lower salary and lack of awareness on the life style post retirement .

18. Aon Hewitt
Retirement and Investment 18
What is the ideal Pay Replacement Ratio
Source: Aon Hewitt Employee Preference Study 2016-17
Above 100%
90% - 100%
75% - 90%
50% - 75%
Below 50%
3-10 10-20 20-40 40-80 > 80
19%
30%
15%
18%
24%
12%
25%
15%
19%
29%
12%
19%
13%
21%
38%
9%
15%
19%
16%
36%
13%
0%
19%
31%
31%
19%
1-2 3-5 6-9 10-20 >20
14%
21%
24%
37%
21%
42%
13%
14%
21%
10%
30%
15%
20%
20%
14%
29%
16%
17%
26%
11%
22%
14%
20%
32%
11%
20%
14%
20%
14%
20%
Work Experience (in Years) Annual Income (in lakhs)
• Employees with lower work experience expect a higher PRR when compared to employees with more work
experience
• Employees with high annual income expect a lower pay replacement ratio. The reason could be their awareness
about the difficulty in matching the current income, post retirement.

19. Aon Hewitt
Retirement and Investment 19
Where do employees invest in
Long Term Saving Options ?
11.3
%
24.7%
29.8
%
8.5%
11.8%
3.1%
3.8%
2%
No Clear Investment
Strategy
Public Provident
Fund
Housing EMIs
Long Term Fixed
Deposits
Long Term
Insurance Plans
ELSS
Private Pension
Plans
Gold Related
Investments
• Owing to the high real estate prices , employees may have to invest a larger chunk from their income in to Housing
EMIs.
• A large population have no clear investment strategy.

20. Aon Hewitt
Retirement and Investment 20
Where do employees invest in
Long Term Saving Options – Work Experience
6 Yrs – 9 Yrs
3 Yrs – 5 Yrs
1 Yrs – 2 Yrs
<1 Year
10 Yrs – 20 Yrs
Younger the work experience lower the
savings options in traditional avenues
Employees with work experience of 6 plus
years save around 24% to 30% towards
housing EMI’s when compared to 6% with
work experience of less than 2 years
Private Pension plans, Gold funds, Equity
Linked Savings (ELSS ) does not appear to be
very popular across all employees
- 25%
- 36%
- 32%
- 45%
- 23%
- 61%
>20 Years
‘No Clear Investment Strategy’ based on Work
Experience

21. Aon Hewitt
Retirement and Investment 21
Where do employees invest in
Long Term Saving Options – Age Factor
41 Yrs – 50 Yrs
31 Yrs – 40 Yrs
25 Yrs – 30 Yrs
18 Yrs – 25 Yrs
>50 Years
Saving towards Housing EMI’s is maximum
between ages 30 to 50 , It is lower at ages
beyond 50 and between 18 to 25 years
The younger employees do not prefer
traditional savings vehicles at 50% when
compared to older employees (> 50 years ) at
20%
Public Provident fund does appear to be a
popular option among all age groups at an
average of 12%
- 28%
- 19%
- 29%
- 7%
- 16%
Preference for Housing Investments based on Age

22. Aon Hewitt
Retirement and Investment 22
Where do employees expect their
Post-Retirement Income to come from?
9.9%
19.4%
24.9
%
9.5%
16.3%
5.4%
9.4%
5.4%
Monthly
Annuity/Pensions
House Rental Income
Interest from Fixed
Deposits
Other Sources
Support from
Relatives/Children
Mutual Fund Monthly
Income
Interest from Long
Term Bonds
Dividends from
Equities
• Employees expect a large part of the post-retirement income to come from Monthly Pension and Annuities owing to
the mandatory savings during the course of employment .
• Fixed deposits too are popular and easy to execute saving options. Many employees expect Fixed Deposit interest to
contribute considerably to their post-retirement income.

23. Aon Hewitt
Retirement and Investment 23
Where do employees expect their
Post-Retirement Income to come from?
Monthly
Annuities/Pensions
Rental Income
Interest from FDs
Dividends from
Equities
Mutual Fund
Monthly Income
Support from
Relatives/Children
Interest from Long
Term Bonds
Other Sources
Overall Male Female Married Single 18-25 25-30 31-40 41-50 > 50
25%
16%
19%
5%
9%
26%
16%
18%
6%
10%
20%
17%
23%
5%
9%
26%
17%
19%
5%
9%
23%
14%
21%
6%
9%
22%
15%
18%
6%
10%
25%
15%
19%
5%
8%
25%
17%
20%
6%
10%
26%
16%
19%
6%
11%
26%
15%
18%
5%
11%
10% 9% 10% 10% 9% 8% 10% 10% 8% 9%
5% 5% 6% 5% 6% 8% 6% 5% 5% 6%
10% 10% 11% 9% 11% 13% 11% 9% 10% 11%
• Male employees expect larger part of the post retirement income to come from monthly annuities while female
employees expect the the post retirement income from Interests on FDs

24. Aon Hewitt
Retirement and Investment 24
What do employees prefer?
VPF, NPS or Superannuation?
Voluntary Provident Fund National Pension System Superannuation
42% 45%
13%
Only 13% of the employees prefer investing in Superannuation over VPF and NPS
24% of the millennials feel >90% of the last drawn salary would be sufficient post retirement
Preference for Superannuation increases with the increase in salary

25. Aon Hewitt
Retirement and Investment 25
Are Retirement Benefits at par with market?
68.3%
Retirement
Benefits
57.5%
Leave
Benefits
59.9%
Health-care
Support 47.3%
Work-life
51.9%
Training &
Education
Programs
39.5%
Recognition
Practices
50%
Fun at
Work
Activities
30.5%
Child-care
Support
28.6%
Children
Education
Support
Owing to the tax efficient retirement benefit design adopted by most companies, the variation
amongst the retirement benefit offering is minimal across companies

26. Aon Hewitt
Retirement and Investment 26
How do Retirement Benefits rank
in Employee’s Reasons to Join an Organization
10
Wellness
Benefit
8
Lifestyle
Benefits
6
Learning
Opportunit
ies
4
Bonus /
Variable
Pay / LTI
2
Work-Life
Balance
1
Fixed Pay
3
Career
Growth
Opportunit
ies
5
Work
Content
7
Company
Brand
9
Retirement
Benefits
Retirement is an important part of an employee’s life and employee looks to his/her employer
to support the endeavor to save for the post retirement life. However, it is not a priority when
choosing an organization to work for.

27. Aon Hewitt
Retirement and Investment 27
How Satisfied are the employees with the
current Retirement Benefit Offerings?
32.9%
1.8%
23.9%
41.4%
10.2%
Extremely Dissatisfied/Satisfied
Somewhat Satisfied
Somewhat Dissatisfied
Somewhat Dissatisfied
Somewhat Dissatisfied
The older employees feel more dissatisfied with their Retirement Benefit Offerings

28. Aon Hewitt
Retirement and Investment 28
Female employees on Retirement Savings
55%
Female employees are
concerned about their
retirement savings.
Close to 21% of the female
employees invest in property as
a long term saving option.
60% of the female employees
feel more than 75% of their last
drawn salary will be sufficient
for their post retirement life.
Female employees expect the
23% of their post-retirement
income coming from Fixed
Deposits
48%
Female employees would
prefer to invest in NPS when
compared to 12% in
Superannuation .
71% of the Female employees
feel that the retirement benefit
provided is at par with Market
Average

29. Aon Hewitt
Retirement and Investment 29
Overall Retirement Benefit Trends
57%
Employees are concerned
about not saving enough for
retirement
35%
Millennials ‘seriously’
concerned as compared to 25%
baby boomers
50%
Millennials feel >90% of the last
drawn salary would be
sufficient post retirement!!
62%
Millennials dissatisfied with the
current retirement benefits
provided

30. Aon Hewitt
Retirement and Investment
Employee Financial Wellness
Employer Strategies

31. Aon Hewitt
Retirement and Investment 31
Introduction – Key Issues Identified
Middle-aged employees are more concerned about retirement savings adequacy
Younger employees do not rank retirement benefits highly at the time of joining
Not all employees understand and acknowledge the need of having an adequate pay
replacement ratio at retirement
No clear strategy towards investment in long term saving cum retirement products
Employees expect their majority of income post retirement will come from pension
plans, however not all are contributing towards pension/retirement plans
consistently

32. Aon Hewitt
Retirement and Investment 32
Financial Wellbeing is a Key Element of Overall
Wellbeing
Financial
Physical
Emotional
Social
Fuel
Energy
Sleep Movement
Growth Security
Freedom
Foundation
FriendsFamily
Network
Work
Colleague
s
Happiness
Resilience
Identity
Purpose
Driven
Wellbeing
Attitudes and
reactions to
everyday living
The ability to
confidently
manage financial
life today, while
preparing for the
future and
anything
unexpected along
the way
Energy to
complete daily
living tasks
Connections
to others
Wellbeing is a
state of balance that
consists of having the
appropriate:
• resources,
• opportunities, and
• commitment
needed to achieve
optimal health and
performance
for the individual
and the organization

33. Aon Hewitt
Retirement and Investment 33
Why is Financial Wellbeing Important to Global
Employers?
Global switch to DC
retirement plans
 Ultimately places more
financial responsibility
on employees
 Means that employees
need to proactively plan
how to ultimately
become financially free
from their employer
Employee financial
wellbeing is now
treated by leading
global employers as a
business issue
Positive financial wellbeing
support from employers
directly leads to:
 Less financial
stress among
employees
 Increased
productivity and
engagement

34. Aon Hewitt
Retirement and Investment 34
Key Components of
an Effective Financial Wellbeing Program
Utilization
Incentives
A comprehensive
program that assists
employees to
confidently manage
financial life today, while
helping them prepare for
the future and anything
unexpected along the
way
Financial
Benefits and
Solutions
Health Check
Tool
Access to
Guidance,
Advice
Differentiated
by Generation
Effective
Two-Way
Communication
Culturally
Sensitive
Modelling
Tools
Urgent
Assistance
Interventions
Employee
Financial
Education

35. Aon Hewitt
Retirement and Investment 35
Country Financial Wellbeing Toolkit Elements -
Examples
Financial
Education
Courses
Flexible FW
Benefits
(trading protection
insurances, benefit
contributions, benefit
accounts)
Savings and
Investment
Workshops
Core FW
Benefits
(e.g. loans/core
insurances)
Financial
Modelling
Tools
Financial
Freedom
Workshops
Employee
Assistance
Program
(financial)
Financial
Health
Check
Financial
Advice
(online
or phone)
Voluntary FW
Benefits (employer
purchasing power
adding value for
employees)
Advice
Education
Benefits
Supplemental
FW Benefits (e.g.
phased retirement,
tuition funding,
financial planning)

36. Aon Hewitt
Retirement and Investment 36
Financial Wellbeing Toolkit Elements Defined
#
Financial Wellbeing
Initiative
How the Initiative Typically Works
1
Financial education
courses
Training is generally on-line and varies by country. Often provided free of charge by banks,
insurance companies and fund managers.
2 Financial health check An individual financial health check. Usually provided in a confidential, independent, setting by a
tax adviser or wealth manager compensated on a fee-for-service basis.
3
Employee direct
financial assistance
This generally takes the form of a loan, usually on a low interest basis or an interest subsidy
payment.
4
Financial modelling
tools
Software to assist employees understand the expected effect of different contribution rates and
investment strategies on retirement income. Tools vary by country and often provided by banks,
insurers, consultants, and fund managers.
5
Savings/investment
workshops
F2F workshops and classes that may be arranged by the employer with financial services
providers, depending on the number of employees interested. Few multi-country providers exist.
6
Employee financial
advice ‘hot line’
Provided by an independent financial advisory firm . The employer typically pays 100% of the cost
of the initial consultation and the employee pays the cost of subsequent consultations.
7
Financial freedom
workshops
Provided to employees in mid career (say age 45+) and spouses may be invited too. The main
purpose is to ensure that employees are orientated towards the need to save and invest for
medium-term financial freedom.
8
Retirement Ready
Workshops
Provided to employees in later-career (say age 60+) and spouses/partners may be invited too.
Purpose is to ensure that employees understand the practicalities of retirement and their retirement
options

37. Aon Hewitt
Retirement and Investment 37
Education Topics : Typical Employee Queries –
India Examples
Retirement
What is the ideal Pay Replacement Ratio at retirement?
What are the most favorable avenues for retirement savings?
To what extent can one withdraw one’s retirement savings during
active service life?
What are the pension/annuity options available to me post retirement?
How can my employer assist me with retirement savings?

38. Aon Hewitt
Retirement and Investment 38
Education Topics : Typical Employee Queries –
India Examples
National
Pensions
System
Should one invest in NPS or alternatives like PPF, EPF, Mutual
Funds?
Where to invest within NPS? Should newly introduced investment
options be explored?
Which fund managers to choose?
What is the accumulated corpus I can expect from NPS at retirement
and what is the accumulated value of tax savings?
Should one transfer funds from Superannuation to NPS

39. Aon Hewitt
Retirement and Investment 39
Education Topics : Typical Employee Queries –
India Examples
What are the tax saving options available
to me as part of my compensation
structure?
How can I maximize my tax savings as part
of my compensation structure
What are other tax saving options open to
me outside my compensation structure
Which are the tax deductible investments
most relevant to my profile?
Tax
Investment options
under 80c
• Contribution to
Pension Fund
• Life Insurance
Premiums
• PPF
• NSC
• ELSS
• ULIPS
• Senior Citizen
Saving Scheme
• Term Deposits
• NPS
• Sukanya Samridhi
Scheme

40. Aon Hewitt
Retirement and Investment 40
Education Topics : Typical Employee Queries –
India Examples
Loans
How to manage my personal finances considering my existing loans
Should I take a loan from an NBFC or a Bank?
Should one take a fixed loan or floating loan under the current interest
rate scenario?
What are the things I have to watch out for while taking a loan?
Should I prepay the loan considering the low interest regime
currently?

41. Aon Hewitt
Retirement and Investment 41
Example – Typical Financial Education Courses
Risk
Management and
Insurances
Home Buying
versus Renting
Understanding
Mortgage
Options
Using Financial
Modeling Tools
Retirement
Planning
Budgeting
Income and
Career
Debt
Management
(including
Student Loans)
Credit
Management
Understanding
the Stock
Markets
Planning and
Money
Management
Saving for Life
Events
Managing Taxes
Paying for
Children’s
College
Wills and Long-
Term Care
Planning

42. Aon Hewitt
Retirement and Investment 42
In Summary : Employer Financial Wellness Strategy
Identify employees financial issues and requirements via
surveys/workshops
Establish a Financial Wellness Strategy based on the issues
highlighted by employees
Select vendors and partners to implement the financial wellness
plan
Implement financial wellness toolkit with the help of vendor
partners
Continuous monitoring and feedback to improve the quality and
efficiency of the program

43. Thank You
Chitra Jayasimha
Chitra.jayasimha@aonhewitt.com
Vishal Grover
vishal.grover@aonhewitt.com
Siddharth Saxena
Siddharth.saxena@aonhewitt.com