Superannuation: 2 weeks pay now can equal one year off later on
Updated: Nov 20, 2019
It's fair to say that the idea of having a job for life and following a traditional career ladder is increasingly unlikely. The future of work is changing - we've shifted roles offshore, and discussion around what artificial intelligence will do to workplaces ranges from 'taking lots of jobs' to 'creating lots of jobs'. Who knows where we are headed?
The Australian superannuation system has also undergone many adjustments and shifts and continues to evolve - but has it been designed for everyone? If it was designed now, what differences might we see? Would super for people on parental leave be compulsory? How would women's altered career paths be taken into account?
Recently, I have become aware of a few organisations that offer their employees an option to take additional paid parental leave (around 2 weeks), or they can trade this in for superannuation being paid on whilst on leave. The particulars of the schemes aside, how much awareness does an average employee have of their spenditude to make this type of decision?
The notion of superannuation and future self presents many challenges for individuals. We essentially care less about our future selves than we perhaps ought to. Giving money to your future self feels a bit like giving it to a stranger and the anxiety of reducing your income for those months of leave, and often years of part time work, can make those 2 weeks pay feel extremely valuable in the present.
Do our employers and super funds have an obligation to provide more information around this type of decision? What if you were told that those extra super payments were the equivalent of a full year off work later on (once the earnings for 30+ years are taken into account)? What if it was enough to fund that trip of a lifetime when you eventually access your super? What would be a reason to take the money now, vs save it for later?
How relevant is your spenditude when it comes to your super? This type of benefit is geared towards Defenders - they immediately can employ their value lens and understand their options. A Spender has already mentally invested in a top of the range pram for their bub - assuming those extra weeks pay will cover it. And a Slender is left confused, torn between what they think they should do and what they could do with the extra cash now.
What considerations should be made when schemes such as this are put into place?
Back when Superannuation first became compulsory in the 90s, the idea of paid super on parental leave doesn't ever seem to have been discussed. Perhaps if super were to be designed now there would be more consideration for the workforce of the future, women and carers, as well as more consideration of indigenous communities.
What other influences does spenditude have on our employee benefits?