There’s no doubt that nearly everyone will face the challenge of changing jobs more than once during their life, and one of the key areas to consider when doing so is the employee benefits package, says Jeremy Hawson, Employee Benefits Divisional Manager at GCI.
“The way a company approaches employee benefits can tell you a lot about how it really cares for its employees, which could be a factor in your ultimate choice between Company A and Company B,” he says. “But more important still is to ensure that the employee benefit programme aligns with your current lifestyle requirements and your long-term retirement goals.”
Hawson says that the main components of a good employee benefit scheme would include group life, which offers cheaper life insurance than individuals can obtain, income replacement in the event of disability (that lasts up until retirement age), dread disease cover, medical aid and funeral costs. All of them have a role to play, but he advises that it is advisable to look at them as a whole in order to assess how well they fit into your own long-term plan.
Also, make sure you’re asking yourself the following questions when considering your employee benefits.
Does your income replacement include a premium waiver?
Income replacement is an excellent benefit but make sure it includes premium waiver on your retirement fund. The basic benefit will provide up to 75% of your current salary if you become too disabled to work, but the truth is your bills will likely remain the same. It will also not take into account any promotions and salary increases you might have earned during your career. Given this lower income, it is unlikely that you will be able to keep up payments into your retirement fund. A premium waiver means your employer would take out a policy to cover payments into your retirement fund if you are on income replacement.
Is the disability benefit a lump sum?
When it comes to disability benefits, beware of lump sum payments. These take a long time to materialise because the inability to work forever takes a while to prove. Income replacement is more flexible. And, lump sums are seldom enough to generate the required income.
Can I adjust my medical aid?
Make sure that the medical aid is flexible enough to be adjusted to your family’s requirements as they change, which are likely to change over time. A one-size-fits-all medical benefit can actually be a disadvantage.
Is the funeral benefit adequate?
Hawson says R25 000 is the bare minimum for a funeral these days. Make sure it’s covered.
Will I need to top up my benefits?
Make sure that your retirement benefits are structured to provide you with the income you will need. It is more than likely your company scheme will need to be topped up – work with a retirement specialist.
Will I have access to a financial planner?
A very worthwhile benefit that companies are starting to offer is access to a financial planner or coach, or some sort of financial education programme. “If your job offer doesn’t include this benefit, it is worthwhile asking for it. A specialist can help you ensure that your benefits, including your medical aid and retirement saving, are all aligned for maximum efficiency and with your current lifestyle needs,” he says.
Is your employer offering you the best chance to retire safely and securely? GCI Employee Benefits, offers a free independent fund audit to assess your company’s fund score. Click here to find out more.