Keeping contingent workforce “super” connected

The CEO of Kinetic Super discusses how HR professionals can better engage Australian contingent workers on superannuation matters

Keeping contingent workforce “super” connected
Katherine Kaspar, CEO of Kinetic Super, discusses how HR professionals can better engage Australian contingent workers on superannuation matters and contribute to their financial wellbeing.

The flourishing ‘gig economy’ in recent years has undeniably contributed to the rise of the contingent workforce in Australia, with this group of employees projected to grow to 35 per cent by 2020, representing around 3.2 million workers1. This trend is seen across a broad range of skilled professionals, with millennial workers leading the charge.  

While much has been discussed around how HR professionals can attract the best contingent workers, I’m keen to draw the attention to the financial wellness of this workforce segment, particularly relating to their super savings.

It doesn’t come as a surprise that super isn’t exactly a top-of-mind topic for many Australians. Even less so for contingent workers whose priorities are often more about securing their next work stint than thinking about how to build their retirement savings through super.

By the very nature of their role, contingent workers frequently switch jobs or sometimes take extended career breaks. This means they could accumulate multiple super accounts over the course of their working lives, especially if they didn’t notify past employers about their existing chosen super fund.

Having multiple super accounts often means having to pay multiple fees and insurance premiums, and this can really start to add up and eat into super balances, particularly for contract workers who move from one job to another over a short period of time. The rule of thumb is each individual generally only requires one super account. Where choice of fund is available, it’s a good idea that HR professionals inform their contractors that they are entitled to choose where their employer pays their super contributions into, and this can help avoid creating unnecessary multiple super accounts.   

Increasingly, more and more super funds offer purpose-built products designed to meet the unique needs of various employee groups. This includes Kinetic Super’s introduction of insurance cover that maximises members’ protection at times when they can afford it and switching it off when they can’t.   

The Government also recognises that our workforce is ever-evolving, with people having different work patterns across their lives. With this in mind, the Government has introduced a number of changes to improve the flexibility of the superannuation system, which came into effect on 1st July:
•    Allowing more Australians to claim a tax deduction for personal superannuation contributions made to an eligible fund, irrespective of their employment arrangements;
•    Encouraging partners to make contributions to their low-income spouses’ superannuation by extending the eligibility for individuals to claim a tax offset for these contributions;
•    Removing barriers to innovation in the creation of retirement income products by extending the tax exemption to other products such as deferred lifetime annuities; and  
•    From 1 July 2019, allowing individuals to access their unused concessional caps so that those with interrupted work arrangements and low superannuation balances can make ‘catch up’ superannuation contributions.

Getting Australians to proactively take charge of their financial futures through superannuation savings is an ongoing task for the whole industry. That said, HR professionals do have a role to play in contributing to the financial futures of contingent workers by encouraging them to stay connected to their super and that they can choose where their super goes so they can take their chosen fund with them to every job.

1Source: Ben Eubanks, Associate HCM Analyst, Brandon Hall Group (2015). http://www.asx.com.au/asxpdf/20170327/pdf/43h257jj3l34r2.pdf Kinetic Superannuation Ltd (KSL) (ABN 14 056 917 303 AFSL 222590 RSE L0000352) is the Trustee of Kinetic Superannuation Fund (KSF) (ABN 78 984 178 687 RSE R1000429) which includes Kinetic Smart Pension (KSP).
This information is of a general nature only and does not take into account your personal objectives, financial situation or needs. Before making a decision about Kinetic Super you should obtain and consider the Kinetic Super Product Disclosure Statement (PDS) and Incorporated Information, and also consider your personal circumstances including any implications of the transfer on you personally (such as loss of benefits and fees or costs that may arise). For a copy of the PDS, call us on 1300 304 000 or visit the Kinetic Super website, kineticsuper.com.au

 

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