We’re not in 2019 anymore. Four years after Covid-19 turned our lives upside-down, employers and employees are still navigating the new world of work. In response to global trends, customer preference changes and regulatory shifts in pursuit of better retirement outcomes, Old Mutual Corporate has launched a range of wellbeing solutions for retirement fund members, open only to existing clients at this stage. 

“Our approach to employee benefits is long-term,” says Humphrey Mkwebu, GM: Employee Benefits Solutions at Old Mutual Corporate. “Our member-for-life strategy focuses on long-term outcomes and is delivered through a suite of institutionally priced integrated solutions. As much as we have industry-leading solutions across where we play, including the Old Mutual SuperFund which has nearly half a million members, our real ambition is to showcase that on a balance of probabilities, a customer is likely to attain better retirement outcomes by being in our funds than if they were anywhere else.”  

Debt management through Right Track®

One of these solutions is Right Track®, which assists employees who are battling with personal financial challenges. “Our analysis of payslips of employees, across industries we serve, shows that some employees are taking home a very tiny fraction of their pay due largely to payroll loans,” says Mkwebu. “We have even seen cases where employees take home nothing.”

Out of sheer desperation, more and more employees are turning to employers for financial assistance. Some are resigning to access retirement savings (which impacts their long-term financial outcomes), while others are falling into the payday loan trap.

“Some lenders offer employees loans they cannot afford; and when they start to struggle to repay, these loans are recycled or consolidated on extended terms,” says Mkwebu. “Compounding that is they also overcharge for credit insurance, basing the cost on the full initial loan amount and not the decreasing outstanding balance. As a result, the total insurance premium is excessive relative to the size of the loan. Workers find themselves paying in perpetuity. The Two-Pot Retirement System, which we fully support, will provide some short-lived relief when finally launched, but it will not address the root causes of the problem. It is also not advisable to use long-term savings vehicles to solve short-term, everyday challenges.”  

Right Track®; an Old Mutual employee benefits solution provided by Empowerfin, aims to solve that. With just a name, surname, and ID number, a financial diagnostic process begins to help free employees from reckless lending, prescribed loans, illegal garnishees, Debt Collector harassment, overpriced credit life policies, and more. “We free up cashflow back into the pockets of employees, so they have breathing space,” says Mkwebu. “They can also decide to use the freed up cashflow to access savings and insurance solutions that protect them in emergencies. Within the provisions of POPIA, we also provide requisite employer level reporting and insights to inform people strategies.”  

Avoiding the debt trap with Smart Salary® 

While Right Track® aims to get employees out of debt, Smart Salary® provided by PayCurve looks to prevent them from getting into debt in the first place – or from accessing their long-term savings, which is another major impediment to their desired retirement outcomes. 

“Smart Salary® is simply an option given to employees of our existing clients to get paid some of their earned/accrued salary before the end of the pay cycle,” Mkwebu explains. “This is a flexible, new-world-of-work-ready solution that prevents and breaks the cycle of short-term credit reliance. It includes gamified financial education and financial controls giving employees the ability to escape the short-term debt spiral.”

Smart Salary® charges an ATM-type withdrawal fee. “It’s cheaper than credit options, priced only for our existing clients” says Mkwebu, adding that unlike other earned wage solutions, Smart Salary® performs an affordability assessment, ensuring the appropriate level of financial support for the employee.

“While Right Track assists over-indebted employees to free up cashflow and access risk or saving solutions for emergencies, Smart Salary looks to prevent employees from becoming over-indebted in the first place. 

"We believe Smart Salary® is a responsible and sustainable alternative to short-term debt and even to accessing funds through the Two-Pot Retirement System,” he says.

Better physical and mental wellbeing through Strove, in partnership with Old Mutual

A healthy and happy workforce is a productive workforce. Unhealthy and unhappy employees, meanwhile, are a ticking timebomb – both for their employers and for themselves. The 2019 Physical Activity and Retirement Transitions Study by the UK’s University of East Anglia found that over-55s in particular need to do more to keep physically fit as they approach retirement age. Equally, mental wellbeing is critical in the workspace, especially post-Covid. Unaddressed, small problems become bigger over time, Mkwebu warns.  

“In a world where the World Health Organization estimates that about 52% of all employees are feeling burned out, where increased sedentary time and low physical activity drive chronic disease risk, and where one in seven working-age adults live with a mental disorder, we offer a unified solution,” he says. “Where Right Track® and Smart Salary® offer financial wellbeing, Strove offers physical and mental wellbeing, ensuring we have an integrated and future-ready approach to employee wellbeing.”

The Strove physical health platform offers a wide variety of features that motivate employees to build and maintain healthy lifestyle habits. The Thrive mental health section, meanwhile, helps users to be mindful of their own mental health. Supporting features then help to support and improve mental health and even signpost resources in case of a crisis. Best of all, the platform works with the smartphones, fitness devices and activity tracking apps that many employees are already using.

“While each of these solutions speaks to immediate challenges, they also address long-term concerns,” Mkwebu concludes. “We believe that Right Track®, Smart Salary® and Strove will enable employers to do great things for their employees, supporting them in their ever-changing world.”

Visit Old Mutual SuperFund, our leading umbrella retirement fund, for information on the retirement fund solutions available to employers.