Benefits counselling model employs Fintech for an effective solution
Members must be given access to retirement benefits counselling not less than three months before their normal retirement age, as determined in the rules of the fund and as prescribed.
“The spirit of the regulation is to improve the information flow from the fund to the members and assist members in improving their financial position,” says Strydom.
However, he contends that there is real uncertainty in the industry with regards to how benefit counselling will be provided.
Strydom reports that employee benefits consultants agree that the default regulations present a significant opportunity to impact members who would ordinarily not receive financial counselling.
“More than half of the consultants believe that benefit counselling can improve preservation in the funds. Yet, 66% of employee benefit consultants think that funds will do the minimum to comply.”
Strydom contends the application of the default regulations represents a real opportunity for Salt Employee Benefits to differentiate itself and take a market leading position.
“Very few members actively manage their financial positions, but the fund can be more pro-active in helping its members through retirement benefits counselling.
Salt EB’S retirement benefits counselling solution (powered by ZAQ), which makes use of technology to provide fund members with a ‘real-time’ view of their fund credits and communicate appropriate employee benefits information in real time will be operational on March 1 2019 at Salt EB.
Jaco Wasserfall, director at ZAQ, says the way the solution has been made operative. Salt EB improves members’ knowledge of their retirement savings position by taking a forward-looking approach and giving them access to an online platform that is accessible from any online device, whether it is a cellphone, tablet, laptop or desktop. This is backed up with access to a call centre, and to independent financial advice, explains Wasserfall.
“We have developed a high-tech, high human touch model by including a call centre and financial advisors. The platform is an enabler for both counsellors and members.
“We provide members with education on all their options at all stages of their retirement-saving journey, including a scenario
Photo: Supplied planner that allows members to explore the future impact of different options. Members are then in a position to understand the implications of the decisions they make, and they can share this information with their spouse, family, counsellor or financial advisor,” says Wasserfall.
He contends that for most people retirement savings is a “black box”; most people don’t know how much they have saved towards their retirement or how long it will last after they retire.
“We want to break that black box open and keep people up-to-date with their retirement savings information, as well as provide them with financial education to improve their financial wellbeing.
“Our solution not only provides members with information about their retirement savings and employee benefits, but we are also building financial education into the platform. This improves communication between the fund and the member, because members engage with the fund through the platform and gain real-time information regarding their retirement fund.
“Members are able to access this information in their own time, and from anywhere.
“The platform, which also has an online chat function, gives members the ability to review their information over and over to examine figures and ask questions.
“The graphs are all interactive — when an input is changed the results show up immediately when, for example, members check how long their retirement savings will last or how much they can withdraw every month.
“We want members to take that information to their spouse, family or financial advisor and continue the conversation. This encourages members to take ownership of their retirement and financial situation,” says Wasserfall.
He explains that whatever the trustees of a fund decide around default investment strategies, preservation strategies, or default annuities will be incorporated into the counselling tool.
Ultimately, Wasserfall believes that the new default regulations are a positive development: “Anything we can do to enhance people’s understanding of financial wellness and increase their financial wellbeing is a step in the right direction,” he says.