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Article | Catalyst

Tips to help your employees’ financial wellness in 2021

Wellbeing
COVID 19 Coronavirus

By Andrea Piaia and Jackie Downham | February 8, 2021

Continued financial uncertainty is likely to impact many of your employees during 2021.

An effective strategy, encompassing physical, emotional, social and financial wellbeing, is an important part of the high performing employee experience.

Treating your employees financial wellbeing as an integral part of your broader wellbeing strategy will be vital to your success, and could ultimately be the key to delivering for your customers and driving superior business outcomes.

Tip 1 – Have a financial education program which meets your employees’ needs

Helping your employees make informed decisions about all aspects of their financial affairs produces positive outcomes for them and your business. Here are the principles to help guide your program journey:

  1. 01

    Measure

    Gauge the extent of financial issues in your workforce.

  2. 02

    Connect

    Design benefits programs that connect with employees’ financial priorities, wants and needs.

  3. 03

    Deliver

    Provide education, tools and solutions that fit employees needs and reflect the way employees make financial decisions.

  4. 04

    Motivate

    Leverage education and social networks to support employee decision making.

Tip 2 – Review your default superannuation fund

Government and regulators are looking closely at outcomes for members of superannuation funds, particularly the effect of high fees and low returns. Poorer performing funds are being named and shamed, and proposed legislation requires funds to undertake an annual performance test. That means underperforming funds will have to inform members of their status.

There is also new legislation proposed to ‘staple’ people to their current fund for their working life. If your employees are stapled to an underperforming fund for their entire career, there will be significant financial consequences.

If you haven’t reviewed your default super fund provider recently, it’s time to assess whether it continues to be suitable for your employees.

Tip 3 – Ensure your employees have adequate insurance cover

Help your employees and their families manage the unexpected. Default super funds made some significant changes in 2019/20 on member eligibility for insurance benefits. This was intended to ensure that your employees’ super benefits were not eroded over time by paying for unwanted insurance cover.

But for some of your employees it may have resulted in gaps in their death or disability insurance cover. There may also be gaps in cover for your new employees when they join your default fund. And if your employees choose their own super fund, they may not have any insurance cover at all.

It is important to consider your broader employee insurance needs as part of your people risk strategy and educate your employees, ensuring they can make the right decisions on their insurance requirements.

Tip 4 – Make it easy for your employees to find and effectively use the financial modelling tools they need

Modelling tools can help your employees navigate through the complex retirement savings process and help them to determine what they will need to fund their desired lifestyle. These tools can also help your employees with other aspects of their financial wellbeing such as budgeting, insurance, debt management and savings outside their superannuation fund.

Employers can set themselves apart by making sure their employees have access to, and use, good financial modelling tools.

Willis Towers Watson has the information and experience to help you create the right employee wellness program for your business. Check out our previous blogs here, designed to make your employees become more financially resilient.

Authors

Director, Retirement

Director, Retirement

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