Setting the employee benefits industry straight
Pensionable salary, trustee, normal retirement date, underwriting and risk benefit salary are the most misunderstood terms.
Recognising that many employees struggle to understand the often complicated and technical language used in the traditional employee benefits industry, Momentum Corporate has launched a new website that explains these benefits in a way that is easy for any employee to understand.
This is backed by Momentum Corporate’s Digital Benefits Statement research, which found that financial literacy surrounding benefits is still unequal across the income and age spectrums.
The research, which sampled a wide range of South African employees from 2018 to 2021, showed that younger generations of employees struggle with their limited exposure to financial terms. On average, the research found a 19 percent decrease in financial term familiarity between 2018 and 2021, indicating a dire need to boost financial literacy and help people understand their financial environment and make better financial decisions on their journey to success.
The top five most misunderstood employee benefit terms were found to be pensionable salary (48 percent), trustee (48 percent), normal retirement date (47 percent), underwriting (39 percent) and the risk benefit salary (35 percent).
Momentum’s research found that people too often feel confused and intimidated by the complex concepts and language that usually appear in information and communication about their employee benefits.
Chief marketing officer at Momentum Corporate Qhawekazi Mdikane encourages financial advisers to share the website with their group clients and actively encourage them and their employees to use it. “As an industry, we have to start prioritising the experiences of South Africans. We encourage financial advisers to use the portal and provide feedback so we can help it evolve in the right direction, so it can be shaped to better meet their clients’ needs.”
She says, “Whether your clients are employees or employers, this platform benefits them both. When employees feel more empowered and in control of their financial destiny, they tend to be more engaged and productive in the workplace. It’s a win-win.”
Momentum Corporate’s employeebenefitsexplained.co.za, addresses this industry-wide challenge by explaining employee benefits in plain language. The more than 50 important areas covered include topics like:
• The different types of annuities that can be purchased at retirement;
• Why preserving retirement savings when changing jobs is important;
• The differences between pension, provident, retirement annuity and preservation funds; and
• The trustees who manage retirement funds.
Qhawekazi believes this new platform finally simplifies something that should never have been made so complicated in the first place.
She says, “The average South African employee does not have a deep financial understanding of their employee benefits. And if they don’t understand what their benefits mean, how can they make decisions that will improve their financial outcomes?”
The Employee Benefits Explained website has launched with some of the employee benefits terms that consumers most frequently struggle with. Further development phases will include more terms, informative multimedia content, and interactive functionality, where users can post comments, like, share content, and even ask experts any burning questions they may have.
Qhawekazi concludes, “This is just the beginning of our drive to empower employees to understand their employee benefits. This website provides a good foundation but we are excited for what’s to come, to help more South African employees get further ahead on their journeys to success. We invite all financial advisers to walk this journey with us.”