Fintech has been disrupting different sectors, and while it is not a new phenomenon, it is changing the way people are saving up for retirement, including pension plans.
A pension plan is a type of retirement plan. Companies that provide pension plans often set aside a sum or percentage of an employee’s salary, and invests that sum. These investments grow over time and provide the employee with a good source of income for retirement.
The idea of a pension plan is not new. An income after retirement was available to soldiers in Ancient Rome, while soldiers during the American Revolution were also guaranteed an income for life, which was then called a pension.
How companies can benefit from fintech pension plans
Though pension plans are not as widely-spread across the UAE, expatriate employees are provided with an end-of-service sum: a gratuity that is calculated on every year of service at a company. Emirati nationals, however, have pension entitlements.
Employers in the UAE can make use of fintech in pension plans to attract the best talents in the region. With the support of fintech, managing a pension fund for many employees becomes a simpler task, as all information is readily at-hand and automatically calculated, easing the process.
Fintech services, such as Investera, provide all financial information on a dashboard, which can be accessed by each individual user on their devices anywhere and at any time. Hence, users can view the performance of investments or the sum that they have accumulated over their years of service at a company. Through this, employers can save time and cost, as fewer employees will ask administrative questions on the calculations of their pensions, and employee satisfaction will increase when they can physically view their pensions.
Although fintech predominantly centers around wealth management, ‘robo-advice’ is also another feature reducing costs by replacing human capital, and its availability is making financial planning more accessible for everyone.  Users can receive advice and have their questions answered through this feature, which caters to everyone in a society regardless of their financial background.
Perhaps pension plans are not spread worldwide because they are conventionally viewed as a long and mundane process which needs human capital. However, as fintech is now transforming traditional pension plans, more companies in the UAE may become more keen on applying it, giving them a competitive edge.
Also, by integrating fintech in its internal services, a company can position itself on the frontiers of fintech in the region, as it will be encouraging and guaranteeing the financial security of its employees while providing them with hands-on training on new technologies. It can also be another source of income for the company’s expansion plans.
Overall, fintech is making pension plans more accessible, strengthening the relationship between employers and employees.
 The next frontier: The future of automated financial advice in the UK [PDF]. (2017, April 20). London: Deloitte.