Don’t underestimate the importance of super on paid parental leave
Much of the industry response to the Federal Budget has been centered on what it didn’t deliver. But amidst the chatter, let’s not overlook the critical move towards supporting gender equity within superannuation.
In March, the government announced that it will continue its reform of Paid Parental Leave (PPL) by paying superannuation on the government PPL payment. This isn’t a casual decision, it’s a significant step the Government wouldn’t have taken lightly.
Commencing July 2025, eligible parents with children born or adopted on or after 1 July will receive a superannuation guarantee equivalent to 12% of parental leave payments. These contributions will be taxed at the superannuation tax rate of 15% and count towards the individual’s concessional contributions cap. This move, allocating $1.1 billion over four years, demonstrates a tangible commitment by the government in addressing the gender super gap.
This reform is the latest in a series of changes over the past few years by both Labor and Coalition governments that improve superannuation for women, and low-middle-income workers. Previous changes included removing the $450 per month threshold for super (thanks to senator Hume) and eliminating duplicated accounts and insurance. However, unlike these, the changes to paid parental leave come at a real and substantial financial cost to the Government.
The Super Members Council estimates that a mother of two will have $14,500 more in retirement thanks to this benefit. This helps mitigate the retirement income impact of taking parental leave, especially for women, and normalises parental leave as a workplace entitlement alongside annual and sick leave.
It is essential that super funds develop communication platforms to educate members, particularly mothers, about the new entitlement and its long-term benefits. This may involve interactive online tools and targeted messaging through member portals.
As a result of superannuation being based on your income level and the duration of your working life, it has an inherent bias towards advantaging people who are better off. This must be tempered by tax and policy settings to provide more equity and super on PPL is one of these, therefore we should pause and acknowledge this.
Otherwise, not much to see here…
Federal Budgets generally include a slew of announcements about superannuation. Mostly these result in improvements to the system and better outcomes for most Australians who have superannuation – but they also involve implementation challenges and costs.
This year’s budget was the exception. Beyond super on paid parental leave, there wasn’t much about super at all.
But as it turns out, this is a mixed blessing as the industry is also awaiting greater clarity about the way forward for payday super, financial advice reforms, and the retirement phase.
Waiting on payday super
The 2023 Budget highlighted the need to pay superannuation guarantee contributions at the same time as wages and salaries starting July 2026, but the steps to implementation remain unclear. This uncertainty affects super funds and employers, who need time to develop the necessary technological infrastructure and adjust payroll systems to cater to more frequent super contributions.
Reducing the incidence of unpaid super, increasing retirement incomes, and putting super on a level basis with other employer expenditure, means this initiative is worth it, and it’s great the government continues to be committed to it.
Planning better financial advice solutions
The other big initiative where we’re waiting for legislation to materialise is making financial advice simpler, more affordable, and more accessible. From allowing contact centres to provide more meaningful engagements with members, to new robo-advice platforms, and introducing different levels of financial advisors, there are lots of plans to turn legislative plans into a practical reality. This isn’t strictly a budget measure, but it’s eagerly awaited, nonetheless.
At IQ Group we understand the importance of preparedness and compliance to regulatory change and its impact. With our team’s deep domain experience and knowledge of regulations, systems, data, and process re-engineering, we assist clients to effectively plan for, adapt, and implement regulatory change.
Feel free to contact one of our friendly team members if you have any questions, or would like to learn more on how IQ can help you navigate regulatory change.
In today’s evolving business landscape, a modern operating model isn’t only a luxury—it’s a necessity. Organisations must swiftly adapt to talent shortages, restructuring, and disruptions. But how? The answer lies in strategically identifying and addressing the “noise” within operations and redeploying capacity to gain efficiencies. Redeployment isn’t only about moving people—it’s about optimising capacity, leveraging existing talent, and ensuring agility to enhance employee experience (EX) and foster loyalty. However, that’s only half of the equation.
Over the past few years, customer experience (CX) has been a key driver across industries, notably within superannuation where the focus has shifted towards attracting and retaining members through investing in seamless interactions, personalised services, and intuitive interfaces.
But here’s the twist: CX and EX are intrinsically linked. Whilst EX and CX have historically been treated as separate entities there is a definitive link between the two. But what is it?
Let’s look at it in a “Noise” context:
Customer Noise: Imagine a customer navigating through your services. They encounter roadblocks—delays, confusing processes, or unresponsive channels. This “noise” impedes their journey toward their desired outcome – Customer noise manifests as frustration, dissatisfaction, and ultimately, churn.
Employee Noise: Now shift your focus to the employee’s journey. They face their own set of impediments—inefficient tools, convoluted workflows, or unclear expectations – Employee noise leads to disengagement, burnout, and reduced productivity. It’s the interference that hinders their ability to deliver exceptional service.
In most cases, the noise faced by customers mirrors the noise faced by employees.
So how can organisations tackle this?
Overlay Journeys: Map your customer journey alongside your employee journey. Identify touchpoints, pain points, and moments of truth. Pinpoint the areas where noise disrupts the flow.
Cost of Noise: Noise isn’t only annoying; it has tangible costs. Calculate the impact—financially and operationally. Consider the cost to serve—people, processes, and technology.
Agility as the Amplifier: Agility is your volume control. Be nimble in addressing noise. Iterate, experiment, and adapt.
IQ Group’s Modern Operating Model approach (powered by Xep3) focuses on engagement and knowledge transfer to address practical issues effectively. Recognising the importance of real data to understand these issues, IQ Group through XeP3 involves both employees and customers directly. This collaborative approach serves as a catalyst for change by breaking down barriers, and generating insights that quantify issues and opportunities. Ultimately, this empowers organisations to make informed, data-driven decisions based on a comprehensive understanding of their processes.
If you have any questions or would like to chat with one of our friendly team members, feel free to comment or contact us.
The new year brings new Graduate Consultants to IQ, carefully chosen from an impressive talent pool to be just the right fit for our team and our clients. We take great pride in kick-starting people’s careers in finance and building talent for the industry. As you will read below, our four recruits well and truly have the foundations for being accomplished IQ consultants and we welcome them to the IQ Group team.
Anthony tanevski
I recently joined IQ Group after completing my Bachelor of Commerce, majoring in Management Information Systems, looking to start my consulting career in an interesting and impactful industry, superannuation. Throughout my studies I worked casually as a Food Supervisor at my local fish and chip store, where I developed strong communication and robust customer service skills. Alongside this, I undertook a product management internship at Deakin University, where I expanded my analytical skills and product knowledge. Additionally, I managed my own Social Media Production Business where I developed the importance in continued learning, business vision, leadership and organisation.
Upon discovering IQ Group’s Graduate Program, I was immediately interested due to numerous reasons, largely due to the learning opportunities available through the program which would expose me to impactful work and knowledgeable people. This was supported by IQ Group’s core values that directly aligned with my own principles, particularly values “Learn and Share” and “Relationships”.
From the beginning, all levels of IQ Group including executives ensured that us graduates felt welcomed and supported. They displayed this through open lines of communication and a sense of vulnerability, transparently and honestly answering all our questions. IQ Group explained the unique perspectives and innovative ideas that us graduates bring to a complex environment, highlighting that our thoughts and contributions are deeply valued. I’m thrilled to start my journey with IQ group and am looking forward to learning and collaborating with the team to provide real world value.
daniel zhang
Finishing up a dual bachelor’s degree in Commerce (finance major) and Information Systems, I have now joined IQ Group as a Graduate Consultant who is keen to both learn and grow within the consulting world and superannuation industry. Across my university life, I had taken the opportunity to put myself out there and be a part of many university societies, both as a subcommittee member and eventual director, where I learned to grow as an individual in a social, personal and professional sense. Alongside my studies, I had also spent time working as a Technology Risk Consultant (Intern) at a Big 4 firm, where I was able to develop client relationship skills as well as approach tasks with an analytical lens.
IQ Group’s theoretical and practical approach in assisting graduates into real industry work was an opportunity I couldn’t look past. The firm’s culture and values have resonated with me in how they aim to deliver the best work possible as a collective for their vast client base.
From the minute we stepped in, there was an obvious sense of welcoming from everyone including the executives. All members within IQ Group were keen to assist us onboard and willingly answered any questions we had. The warm atmosphere created by every staff gave the impression that IQ Group really do care about contributing to the growth of us, and I’m excited for what the rest of the year has in store.
joanna lazaris
I have joined IQ Group as a Graduate Consultant after completing a Bachelor of Commerce last year, majoring in Management Information Systems and minoring in Event Management and Wealth Management. Throughout university, I worked part time as a Grill’d Team Leader for 3 years where I was able to expand my leadership and communication skills by overseeing the daily operations of the restaurant and managing staff. I also worked part time as a medical receptionist which allowed me to develop strong emotional intelligence and fundamental customer service skills.
I was attracted to IQ Group primarily for the vast variety of opportunities amongst the Grad Program. It appeared to be a great way to combine my love for working in a team and practicing critical thinking to achieve an end result in order to add value within a business and their clients.
From the beginning of my journey at IQ, everyone within the team was exceptionally welcoming which allowed me to experience the IQ culture firsthand. The team were open to answering any questions from both me and the other graduates and allowed us to feel comfortable to embark on our careers in the superannuation industry. I am excited to start my IQ journey and looking forward to what’s to come
max mccaul
I have begun my journey with IQ Group as a Graduate Consultant after recently completing a Bachelor of Business, with double majors in Economics and Marketing. My recent experience includes working as a project coordinator for Morgan Project Services. This opportunity allowed me to refine my time management and organisational skills, as well as providing me the opportunity to develop my ability to communicate with several stakeholders.
IQ Group was a clear standout among other firms within the industry, the extensive training program was the driving factor that intrigued me. This program would challenge me and provide me with a multitude of opportunities to develop my skills. Also giving me the ability to work with a wide range of clients on a variety of unique projects. It was clear from my first interview that IQ Group have a culture that is uplifting and a perfect place to kick start my career in consulting.
My first week at IQ Group has been overwhelming positive, I and the other graduates have been welcomed with open arms. Everyone has made the transition as smooth as possible and showcased a desire to support us in all aspects of IQ life. The extensive resources provided and the ability to ask questions to all staff members excites me, as I know this is a place committed to helping me succeed. I am eager to begin my career with IQ Group and greatly look forward to working with the team.
IQ Group provides graduates with their career ‘head start’ through training and career development. We provide the right tools, training, and environment to ensure our graduates can achieve career success through mentoring, support and learning.
As part of our Graduate Program, you’ll receive:
A structured program with an initial intensive skills development training covering Business Analysis, Project Management, Data and Change skills, and ongoing professional development including completion of RG146
Mentoring by the IQ Leadership team
Great exposure to a variety of work environments and a network of professionals within the industry
Valuable experience on a wide range of engagements working with a great IQ Group team and clients across Australia
A supportive, collaborative, and values driven team culture
Many important high-level changes are going to be made on the superannuation chess board in 2024, and with a federal election looking increasingly unlikely later this year, they will probably make a lot of progress, shifting the focus and operation of the system even while the details are being sorted.
These changes are intended to improve people’s engagement with superannuation. Many other changes to super were made too often, were complicated and confusing, and led to increased disengagement. Let’s hope these changes are the exception to that rule!
The issues of the objective of superannuation, changes to the retirement phase, the rules around giving financial advice, improvements to member servicing, and communications with super fund members are all closely connected and a change in one will result in a change in the others.
Of course, the prize for the funds best able to meet their member’s best interest is survival and growth. Funds are being held to a higher standard than ever before. With these changes, the bar is going to be especially raised in relation to members at and approaching retirement.
Big changes will have to be made to the back, middle, and front offices of funds and their service providers. While it will take most of this year and beyond for these changes to work through the legislative process, many funds have already started work to respond to anticipated changes, not least because it’s in their DNA to continually improve outcomes for members.
So, what’s superannuation for?
That’s even the case with the Government’s proposal to legislate the Objective of Superannuation as ‘to preserve savings to deliver income for a dignified retirement, alongside government support, in an equitable and sustainable way.’ While that might seem pretty high-level and divorced from the day-to-day running of the super system, it’s actually packed with important meaning.
For example, it says that the focus needs to be on delivering income in retirement and so retirement products need to be improved and developed to do just that; it also means that funds have to help manage financial risk in retirement, so education, advice, and support services that do this have to deliver. Many funds are using this as a high-level template for their own change programs.
Legislation on the Objective is before Parliament and is likely to be debated in the second quarter of 2024.
Cracking the financial advice nut
Also on the legislative radar for this year is a comprehensive financial advice reform package, reflecting the Government’s commitment to reduce red tape and make advice more accessible and affordable.
Under new rules for banks, insurers, and super funds, they will provide more advice on simple matters, replace Statements of Advice with a simpler record of advice, and employ a new class of qualified financial advisers who can provide advice on simple topics while being subject to the modernised best interests duty.
Many funds and platform providers are building new and innovative business models that leverage off the new rules, to provide better services for members and give themselves an improved point of difference.
Better help for older members
Transition to retirement and the retirement phase often hasn’t had the priority it needs. That’s changing as more members approach retirement with more money in super. The regulatory settings are changing to reflect this, and funds have to do more to show they know about these members and their needs and have the right products and services to meet them.
On the back of the newish requirement for funds to have a retirement income strategy, the Government is looking to see what they can do to encourage funds to do more in this space, including possible mandating of products or establishing a national mortality pool. It’s unlikely this will translate into legislation this year, but many funds are taking the challenge very seriously. We can expect to see plenty of innovation during the year, with members being the beneficiaries[1].
But wait, there’s more…
All of this very significant change is happening while there is already a big slate of other changes underway:
Member service standards – Government announcement that regulators will take additional steps to lift standards
Changes to non-arms-length income and expenditure rules – retrospective application from 1 July 2018: Bill now in Parliament
New remuneration disclosure rules (CPS 511) –1 January 2024 implementation
New resolution planning requirements (CPS900) – 1 January 2024 implementation
New ways to make statutory declarations – 1 January 2024 (digital later in 2024)
Implementation of new financial reporting and audit rules for super funds – generally 30 September 2024
Financial Accountability Regime – 15 March 2025 implementation for super funds
New earning tax for people with more than $3 million in superannuation – implementation from 1 July 2025
Payday Super – 1 July 2026 implementation
Review of super fund product performance assessment
New and reviewed cyber-security legislation, including for critical infrastructure
Ongoing changes to APRA data reporting
Ongoing APRA review of the sustainability of group life insurance in super.
Increased prosecution activity by ASIC
Requirement for improved super fund approaches to cyber-frauds and scams
We look forward to going on the journey of superannuation change with you. After all, if there is anything that’s a constant in superannuation, it’s change!
Having collaborated with a variety of organisations, big and small, across diverse industries with strategic goals spanning from run-off to world domination, I’ve witnessed it all – the successes, the failures, and the downright messy. Yet, it is these experiences that have armed me with crucial insights and lessons for designing and executing a successful Operating Model.
Current State Analysis is crucial
Whilst the current state, as reflected in existing company IP and document, offers valuable insights, true value lies in deciphering the unspoken rules that shape organisational culture, information flow, communication, and issue management – essentially the unwritten handbook steering business operations. Leaders need to grasp the reality of HOW their organisation operates, the ugly and all. This analysis should be the right fit, avoiding unnecessary complexity, crafted to reveal and present reality.
Surprisingly, some leaders shy away from confronting the genuine challenges and opportunities for improvement – the roadblocks for success, however understanding and embracing the full, unfiltered truth is key.
Success lies in understanding the interaction between the elements of your Operating Model and the “non-written” rules of engagement
An organisations Operating Model goes beyond people, process, and technology, as explored in IQ Group’s Modern Operating Model design framework. It is vital to grasp how the elements influence organisations Cost to Serve, Ability to Adapt, and Customer Experience, whilst understanding external impacts.
Understanding the dynamics of these interactions involves exploring informal communication, issue resolution, relationships, and organisational culture. As Brian Peters, IQ Group’s CEO quoted in his recent blog from Peter Drucker: “Culture eats Strategy for Breakfast”.
With tools and technology such as Enterprise Lens and XeP3, IQ Group can assist leaders in making informed, data-driven decisions through the analysis and identification of core processes and inefficiencies in an accelerated timeframe.
Craft a powerful top-down message and ensure leaders are in sync with strategic goals
Without a clear, articulated vision of strategic objectives and future outcomes, the path to achieving these goals can become clouded, causing unnecessary noise, complexity, and obstacles to successful delivery. This is why it is crucial to foster clear communication from top down, ensuring understanding and alignment of strategic goals.
Success demands a clear vision – Crafting a prioritised, data-driven roadmap from present to future
Desmond Tutu insightful metaphor, “There is only one way to eat an elephant: a bite at a time”, underscores the importance of a step-by-step approach. Adopting this perspective, crafting a well-structured, prioritised, and future-oriented roadmap ensures clarity and momentum, whilst allowing for adjustments during the journey to accommodate for the impacts of internal and external variables.
These insights form the key, and unfiltered learnings for designing and implementing an Operating Model. Leveraging technology and tools such as XeP3, IQ Group can assist organisations in aligning their operations with their overarching strategy.
For more information on our partnership with XeP3 please read our announcement on LinkedIn.
If you have any questions or would like to chat with one of our team members, feel free to contact us.
Peter Drucker, one of the most widely-known and influential thinkers on management was famous for this quote: “Culture eats strategy for breakfast.”
As IQ continues to research more into operating models for the future, we have continued to see time and again the difference the right culture can make in building a successful organisation.
While the vision and strategic objectives of organisations vary, there are 4 cultural characteristics that resonate in a modern approach to operating models and are foundational in transforming your operating environment.
A culture that puts the customer first
It’s no secret that an organisation that has a customer centric focus embedded throughout their culture reap successes in the form of enhanced loyalty, brand advocacy, and employee engagement.
Understanding what customers actually want, and their trends using feedback and critical insights, can be a catalyst for an agile and competitive operating environment.
A culture that embraces continuous improvement
An organisation that embraces the need to continuously improve empowers a mindset of perpetual learning, fostering an environment where employees are active contributors who are motivated to do their best, sparking innovation and autonomy to achieve a collective vision.
A culture that embraces transformation
We all know that change is the one certainty in this age. Giving your team the autonomy to pivot and champion innovation creates a foundation of agility that is key to inspiring a team that is not afraid to transform.
It is this culture that acknowledges that transformation is not only a necessity but an inherent part of growth, fostering forward thinkers who embrace the next wave of change.
A culture that values collaboration
Collaboration serves as a dynamic catalyst for innovation, recognising the impact of collective intelligence and creative synergy generated when business and technology converge.
It cultivates an environment that is empowered by ideas, marked by a pursuit of feedback, and commitment to diverse perspectives. Collaboration breaks down departmental silos and hierarchies to promote open communication and a more cohesive organisation
These essential cultural principles are why IQ surround the components of any operation with the foundational metrics of Customer Experience Excellence, Cost to Serve, and Ability to Adapt. These metrics serve as a compass, signalling precisely when levers within the operating need to shift, helping organisations to align their operation with their overarching strategy.
If you have any question or would like to chat with one of our friendly team members, feel free to comment or contact us.
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