Australia: Benchmarking Employee Benefits in Australia for 2020

Benchmarking Employee Benefits in Australia 2020To get an insight into benchmarking employee benefits in Australia for 2020, read this market guide provided by CA Financial Services Group.

For over 37 years, CA Financial Services has assisted employers with the construction and management of their employee benefits programs. Consequently, they are often asked for their expertise on the subject. To answer employers’ most common benefit questions, our Australian Partner created this market guide.

In comparison to the 2019 market guide, there are a few material changes to note for this year:

  • Costs of group death and disability lump sum payments increased to 0.5% to 0.8% of payroll.
  • Salary continuance increased as well averaging 0.8% to 1.2%, therefore, shorter benefit periods are more common.
  • Additionally, employers are fully paying for 5 years’ salary continuance plans rather than comprehensive plans paying to age 65.
  • Estimated health cover premium ranges increased:
    • Single cover ranges from $1,300 (Basic) to $4,000 (comprehensive with extras and low deductible)
    • Families ranges from $2,700 (basic) to $9,200 (comprehensive with extras and low deductible)

An example of what’s inside…

When benchmarking employee benefits in Australia for 2020, know that retirement matters most.

Superannuation, or retirement, is a mandatory benefit in Australia and is subject to legislative requirements. Employers must follow the ‘Choice of Fund’ legislation or automatically enroll eligible employees into a complying superannuation scheme.

The legislated minimum is currently 9.5% up to a maximum quarterly salary of $55,270 (i.e., contribution of $21,002.60 p.a.). Furthermore, employees can elect to salary sacrifice pre-tax dollars into the fund (up to yearly limits).

The numbers shown above are minimum requirements and serve as an illustration. Most employers base their contribution strategy on industry norms and benchmarking data, which can vary from sector to sector.

Areas that need care

  • Contributions — Do the benchmarking. Are they similar to others in your sector?
  • Supplier — Selecting the best supplier based on service and costs is important. This will largely depend on member numbers.
  • Included insurance — Default employer plans have a basic minimum of life and disability lump sum cover. However, larger employers typically look towards higher levels of cover. This provides the benefit of scale. For example, auto cover and cheaper premiums.

 

If you need support with your employee benefits in Australia, please contact Asinta, and we will put you in touch with CA Financial.