In brief

Many employers provide post employment benefits such as pensions, severance benefits, long service rewards or medical benefits as a tool to attract, retain and care for the well being of loyal employees.

Many countries further require employers by law to provide certain minimum level of long service rewards for employees. Often, the amount of benefits are uncertain until the time of termination or retirement as they are linked to employees’ salary or inflation during the employment years. As a result, many employers are unprepared for the financial burden and risks associated with their promises which often lead to unpleasant surprises.