retail retirement
Piggy Bank On Deckchair With Sunglasses


One in five small and medium enterprises (SME) owners believe their business would be unable to support them for longer than a week in the event of their unplanned absence.

These figures come from research commissioned by Rest Industry Super to discover the attitudes of Australian entrepreneurs towards retirement. The survey revealed a sizeable gap in most SME’s insurance cover arrangements.

Rest chief executive, Damian Hill, said that although SME owners were responsible for ensuring the livelihood of around 4.7 million working Australians, they were typically less conscious of the risks around their own financial wellbeing.

“SME owners are relatively unprepared for the future when it comes to planning for their financial security—in terms of both their ability to continue supporting their livelihood following an unexpected event, as well as their plans for an eventual retirement,” he said.

Co-owner of retail chain The Party People, Dean Salakas, has had to consider this while running his business alongside his brother.

“The business keeps us alive, the way it’s structured we’re not contributing a whole lot to super,” he told Retailbiz.

“It’s something my business partner and I have been talking about and we’re going to do something about it. There’s always a possibility that something could go wrong.”

Hill said that not contributing a lot to superannuation is common among SME owners, with many considering the sale of their business to be a retirement plan. However, this has inherent risk.

“SME owners [need] to look beyond the sale of their business to fund their retirement by making sure they make regular superannuation contributions,” he said.

“SME owners put themselves at risk if they rely solely on the sale of their business—and the assumption that it will remain viable for sale—upon retirement.”

When it comes to their employees’ superannuation, 82 per cent of SME owners said they believe it is the responsibility of their staff to choose the fund that is right for them. Nearly half of respondents said they took less than five minutes to choose their businesses’ default super fund.

“While the primary responsibility for superannuation lies with the employees, actions taken by employers can make a difference to the financial wellbeing of their workers when they retire,” said Hill.

“It might only take another five minutes, but taking that additional time could mean tens of thousands of dollars in retirement savings accrued by your employees, if they remain in the same fund over the long term.”

As a growing business Salakas said he is invested in his employees, including when it comes to superannuation.

“If an employee is getting a pay rise we will discuss what they want to do with the extra money, and if they want to salary sacrifice,” he said. “Especially if it is a pay rise with a tax implication it might be better to salary sacrifice, so we do advise employees to seek financial advice.”

The Rest survey showed that superannuation is a way for employers to make their business more attractive to potential employees.

“With the workforce becoming increasingly mobile and relying on a greater number of part-time or contingent jobs, employers need to look beyond traditional means of attracting and retaining employees,” said Hill.

“In this environment, superannuation isn’t just a cost. Employees are now looking for salary packaging options which reflect their concerns about living longer and maintaining a comfortable lifestyle in retirement.”


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