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Financial wellbeing and literacy in the workforce

Media release - 25 October 2022

Employer superannuation obligations are a well-established part of the Australian employment landscape, with many soon to be retirees being the first generation to have spent their working life saving through the system.

While the system has remained constant, the world and work environments have changed immensely in that time, and financial pressures have increased.

Many employees, particularly those facing retirement, have both a lack of the knowledge and support to make financial decisions with confidence.

This has increased the pressure on employers to fill that gap, and education is seen as a vital component to do that.

In an employer roundtable hosted by Australian Retirement Trust’s National Education Manager, Joshua van Gestel, leaders from a range of sectors discussed how employers can respond to help get better outcomes for their employees in retirement.

Dr Linda Colley, Queensland Government’s Special Commissioner for Equity and Diversity, Charlotte Flower, People Manager at BlueScope Australian Steel Products (BlueScope), and Esme Strydom, Director of People at Brisbane Grammar School (BGS) have very different workforces, but all employees are facing the same financial pressure and strain, regardless of their role.

Financial education, including around superannuation, can play a key role in retention, employee wellbeing and workforce engagement, but employers need to find the right partners and allow time to access the support on the job.

Education needs to be seen as more than an obligation, and as a vital part of workforce management and employee engagement according to Ms Strydom.

“I don't want to call [superannuation] an obligation because the moment it does it becomes a tick sheet. I want to look at everything for employees, what is it I can do to make their lives better,” Ms Strydom said.

“Most people don’t know how the systems work, and it’s part of my role to inform people. It can have an impact on their life, particularly the group that will retire in the next five years. As an employer, there’s a role there to help people.”

She acknowledged the need to provide financial education from a young age, to help employees have the confidence and ability to make plans and decisions.

Dr Colley’s role has had an increasing focus on employee retention, including on women’s financial wellbeing.

“It’s always been obligational, but we want to change super to be an opportunity,” Dr Colley said.

Women on the verge of retirement have significantly less super than men, something Dr Colley said is a “huge opportunity to change” through education and other support.

She said employers can help bring together the super fund and the employee to help improve financial knowledge.

“Super funds offer great options, but we [employers] haven’t bridged the gap to employees, particularly nervous or reluctant employees,” said Dr Colley.

Dr Colley also highlighted the role of the employer in making this possible, with many employees focussed on their current day-to-day role during working hours.

“Getting permission from their employer to help make financial wellbeing possible is important,” she said.

Ms Strydom agreed that partners are essential, as those in people management roles don’t always have the specialist knowledge.

She said financial education needs to be done “in partnership” and to motivate employees as part of both professional development and personal wellbeing.

“It’s important to set aside time and plan properly to increase involvement across an organisation,” Ms Strydom commented.

She called on super funds to offer direct support to employers, including the provision of financial planners, to host education sessions with employees.

“It can almost be a little bit of a broad-brush approach and then people get a feel [for financial advice about retirement] and if you need further individualised advice then you can make an appointment,” said Ms Strydom.

The challenge increases as employees face retirement, with Ms Flower highlighting more needs to be done in that space.

She said that BlueScope have general wellbeing programs, but those that want to exit into retirement face extra challenges, including being ready for retirement from a social and psychological perspective and navigating the complexities of income and pensions.

“When we talk to some of our employees, they’re surprised that they’re eligible for [the age] pension as they’re well paid and have good super schemes,” Ms Flower said.

She said there’s a need to “show employees all opportunities with an education piece on what they can do in retirement both from a financial and psychological perspective.”

While there’s a perception amongst employees that retirement means no more work, financial education in the lead up can help both the employee and employer plan their workforce for those final years.

“Planning helps with getting new employees into a business, but also have retirees available to continue to help [in a different capacity]. We need some of those people in our workforce,” Ms Flower said.

If you would like to consider providing financial wellbeing and education within your workplace, particularly for those approaching retirement, please reach out to your Australian Retirement Trust relationship manager or call us on 13 11 84.

The opinions expressed and those providing comments are theirs alone, and do not necessarily reflect the opinions of the Trustee. No responsibility is taken for the accuracy of any of the information supplied and you should seek advice for your circumstances.

Australian Retirement Trust Pty Ltd (ABN 88 010 720 840) (Trustee) as trustee for Australian Retirement Trust (ABN 60 905 115 063) (Fund).