Managing costs

How to improve business culture at no cost

Employees are such an important part of our business. In many cases we can’t operate without them. In turn, we pay them, provide training and, where possible, promote them. For many people, this isn’t enough to satisfy the feeling of being respected and rewarded for what they do.

There are strategies to improve workplace culture and options to provide staff benefits that don’t cost the business directly, yet make the staff feel cared for while improving internal culture. Offering a solution that ensures in the event of sickness, accidents and other medical issues, they and their families will be ok.

A better workplace culture: it’s all about making the right choice

Superannuation is compulsory. Employees are entitled to receive a minimum of 9.5% of their gross income paid into this taxation retirement vehicle. Some employees elect to make their own choice of superannuation when they join an employer, and many others take the default fund offering. Is this the best solution?

Employers have a choice, no matter which industry they are in, to provide a corporate superannuation offering for their business.

What is corporate superannuation and how can it benefit you?

A comprehensive corporate or employer superannuation fund enables employers the ability to offer a staff benefit at no direct cost to the business. This type of superannuation fund allows staff the ability to join the new superannuation fund and benefit from extremely low fees, and a comprehensive insurance offering not available in other types of superannuation policies.

How does corporate superannuation work?

The low fees are achieved by having multiple people within the fund where at a group level the balance of the funds is combined to provide large plan discounts to members.

The group insurance offering in the right corporate superannuation fund is invaluable where, without medical evidence, and provided you haven’t been diagnosed to have less than 12 months to live, you can access 100% comprehensive insurance including Life, Total and Permanent Disability and Income Protection Insurance at lower costs. This is possible as it is priced at a group level, enabling extra discounts.

Employer superannuation funds in action: case studies

These true stories are a perfect example of how powerful and important this cover is.

A male employee joined one of the corporate superannuation business plans we had in place in the business. Three years prior to joining the corporate fund at the age of 27, the employee had a nasty cancer, spindle cell carcinoma, in their right arm. They were unable to get insurance by applying through the normal process because of this pre-existing condition.

The employee joined the employer’s corporate superannuation fund and was provided without medical evidence, no loadings or exclusions, $650,000 of Life Insurance, $650,000 of TPD, and Income Protection of $7,000 per month with a 30-day wait and benefit period of two years. The employee was ecstatic, not because they expected to get sick again, but because this provided them and their family certainty that if they were to get sick again, they would be ok.

Sadly, the cancer returned six months later and, at the age of 29, they were told by the oncologist that they had less than 6 months to live.

Recognising the difficult position the employee was in, I developed a plan, and we were able to have a $650,000 terminal illness claim turned tax free through advice and ongoing monthly income protection payments. In an amazing turn of events, through treatments and nutritional changes, they moved into remission and the money is still there for them and their family.

Power of positivity

Stress is often linked to financial worries, not only for the person going through the illness, but also for the family that may be left behind. Having claims paid in uncertain times takes much of the stress off the table.

A further example of the benefits to people who have current illnesses where they wouldn’t normally be able to access comprehensive insurance without exclusion, is that of a woman who had depression and anxiety due to events in her life. They joined the corporate plan, again without the need for medical evidence, and was provided cover of Life, TPD and Income Protection.

The condition returned three years after joining the plan and they were paid out a significant TPD payment and Income Protection. In this case, this will continue until they are 65.

The difference between superannuation and insurance

Superannuation and insurance aren’t the same. In many cases where insurance is provided within superannuation without medical questions being asked, claiming can be far more difficult as the devil of the details is within the Product Disclosure Statement.

Terminally ill cancer patients have been provided pro-bono services through the Cancer Council program. From our experience, various superannuation providers, many within the industry superannuation fund network, have been extremely difficult to claim on and cause an increase in stress in such difficult times.

Having the right corporate superannuation plan in place, for even the smallest of businesses, provides a staff benefit at no cost to the business. This has proven benefits for culture, staff care and loyalty. Something we all need.

Les McGuire

Les McGuire

Senior Managing Partner, Future Proof Financial Planning

Les was awarded 2017 Australian Financial Adviser of the year. He's an experienced Managing Director with a demonstrated history of working in the financial services industry.

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