Vision Super has helped implement an innovative program based on behavioural economics at Mount Alexander Shire Council, with more than 70 per cent of employees taking part.
The program, known as ‘Save more later’, was based on behavioural economics suggesting that people value their future self less than their current self.
Council employees could opt into the program, which divides pay rises between staff members’ pay packets and their superannuation contributions, as part of a three year enterprise agreement that was approved by Fair Work Australia last October.
“Our research suggested that if you ask people to save more now, they are likely to say no, even when you give them all the information about why they need to save more to have a comfortable retirement,” Stephen Rowe, Vision Super chief executive said.
“But if you ask them to save money they don’t have yet – for example from a future pay rise – they’re very likely to agree.”
Darren Fuzzard, Mount Alexander Shire chief executive said that staff at the Council had been very engaged in the process, with nearly a quarter of employees deciding to contribute amounts above the levels in the enterprise agreement.
“We knew it was a positive step for financial wellbeing, which can have a big impact on workplace morale and productivity. But I don’t think any of us realised how much it was going to increase engagement,” he said.
Rowe said that there were currently a number of enterprise agreements being negotiated or finalised that included the ‘Save more later’ program.