Although it’s not something that might cross every business owner or manager’s mind, it’s important to educate your team about things outside of the scope of their role. For example, providing your employees with life skills and tips to help them take advantage of a dedicated resource like their superannuation.
Although long-term full-time workers may already know the ropes, you should consider educating new starters or graduates about the ins and outs of superannuation. Here are a few ways that businesses can help their employees make the most of their super.
- Salary sacrifice
Help your team make the most of their super by educating them and providing them with salary sacrifice options. That way, employees can choose to make contributions of an amount of their choice (capped at $25,000 a year) through a salary sacrifice agreement, and you can take on the responsibility of handling the transactions on their behalf.
These transactions are classified as employer super contributions, rather than employee contributions. However, let your employees know that if they contribute a certain amount or are within a certain threshold, they will be obliged to pay tax, usually at a maximum rate of 15% (which is most likely what they would have needed to pay in tax otherwise).
Let your graduate employees know that they can take out life insurance and/or income protection insurance through their superannuation fund. Although they might not need it while they’re young, it’s still a good idea to educate them on the importance of protecting their income in case something goes wrong.
Sometimes life insurance and income protection policies are cheaper when taken out through your superannuation, so let them know of the perks. However, it’s important to ensure that they’re not paying for insurance that they may not need. For example, disability insurance may be an unnecessary expense. Let them know that they can compare life insurance policies online in order to receive the best value.
- Suggest a switch
Loyalty isn’t everything. If your employees can see that there may be a better fund for them, encourage them to make the switch if it will mean better long-term value. Although it’s not up to you to encourage someone else to change funds, it’s still helpful to provide your team with the knowledge they may need to make an informed decision. However, you should also remind them that they may lose insurance benefits if they decide to switch, and you should encourage them to check this first before making a change. There could also potentially be exit fees.
Although, historically, businesses have no obligation to help their employees with their super, that doesn’t mean you shouldn’t. Providing your team with the options and information they need to make the right decision could really help them in the long term.
About the author
Richard Laycock is an Insurance Expert at financial comparison website finder.com.au.