Super Simple Chats

Lydia

The super industry in Australia is actually the fourth largest pool of retirement assets in the world.

(theme music starts)

Ange

Welcome to Super Simple Chats. Rest's very own podcast. We will be speaking to industry experts about all things super. Trying to make it understandable and relatable for everyday Aussies. After all, it's one of the biggest assets you'll ever have.

Ange (V/O)

We're recording this podcast on Gadigal land. We pay our respects to elders past and present.

Any advice you hear on this podcast is general in nature and doesn't take into account your financial situation, needs or objectives. Issued by Retail Employees Superannuation PTY LTD. Before deciding to join or stay, consider the relevant PDS and TMD at rest.com.au/pds.

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Ange

Super can feel like a little bit of a mystery. Especially when you first realise that the money's not just sitting in your account, but it's actually being invested on your behalf. In fact, what you started to realise is that a lot of people think that the world of suits and stock markets can be a little bit complex.

But I'm Ange, and I'm here with my co-host Andy, and we're joined today by Lydia from Rest. And we're going to debunk some of these things and talk a little bit more about the investment basics. So in today's episode we're going to be chatting about what's happening behind the scenes with your super, what investment options are, what asset classes are and how risk and return kind of work together.

Additionally, I think we're also going to talk about the difference between growth and defensive assets. And we're probably going to give you a little bit of a sneak peek into Rest’s investment menu. So thank you for joining us today, Lydia. We're really excited to have you on the show.

Lydia

Ange, Andy, thank you for having me.

Ange

So as we've discussed a lot in previous episodes, this seems to be, come… it just comes up all the time.

A lot of people don't realise that their super is invested. And in fact a lot, a lot of people think that it's just money set aside in like a savings account. But we know that that's not the case. So can you tell us a little bit more about why super is invested?

Lydia

Absolutely. So, it isn't really money, okay. Not in the sense of money that you have in your hand nowadays that you can spend, but it is yours and it's definitely there for your retirement. And when you get to retirement, the idea is that you will then have that money to spend. So, it's there for our members. And the reason it's invested is to hopefully grow it through that super journey until you get to retirement.

By investing it, it gives it the potential to grow over time. And the idea is, that gives you more money in retirement.

Ange

Which sounds good to me.

Lydia

Of course, investments aren't guaranteed. They can go up and they can go down. But over that long term, and if you start investing when you start working, that's a long time until most people retire. The idea is…

Ange

It's like 50 odd years or something.

Lydia

Yeah, yeah. So hopefully you'll end up with a bigger nest egg by the time you get there.

Andy

I feel like this idea of investing has really exploded over the past five, six years. I can't tell if it's… I've turned 30 and all my friends are putting their money into ETFs and stuff like that and telling me to do the same thing or if, you know, there's been, like, new apps that have come onto the scene, right, I can think of one where it just rounds up every dollar that you spend and puts it aside for you.

Super isn't quite the same as that… probably some similarities here and there, but, it does have some parallels in that, you know, you have funds in your account that are being invested on your behalf.

So can you just give us a bit more of a deep dive into how it really works?

Lydia

Of course. So you're right, there are some similarities. You're getting a little bit of money put aside to grow into more over that long term. And when your super is put into a fund like Rest, it's invested on your behalf by a team of investment professionals. So don't worry, you don't need to know everything about an investment process to, to grow that super for your retirement.

Ange

That’s a relief, because I don't know the first thing about it.

Lydia

Look, there's plenty to know and to understand. And you can, you can easily learn more about it if you want to and if you're keen to find out more. So how does it work?

So that money, which isn't money, but that… your contributions, your super savings. They're set aside, and that goes into what we call an investment option.

Ange + Andy

Got it. Right.

Lydia

So, a superannuation investment option or a super investment option, it's just the way that we invest on your behalf to help your funds grow.

Different options have different levels of risk and return. So for example, some of our investment options which might invest more heavily, so have a greater allocation, a larger allocation to shares, equity.

Ange

Yep. So that's a term I understand.

Lydia

Okay, they’re typically higher risk. So they potentially have higher return.

SFX: Record scratch. Video pauses.

V/O:

Hey everyone, Ashley from Rest here.

When we talk about risk it can sometimes mean different things. In this podcast, we mean investment risk – the chance your super returns could go up or down in value more than expected. Sometimes returns can be lower than expected, and in some cases, you might lose money.

Now, back to the pod…

SFX: Video speed up

Lydia

And others might focus on investments that are deemed less risky or more defensive and have a higher weighting to those, and they might be more invested in things like bonds or cash.

Ange

And just to kind of dive a little bit deeper into that. My understanding is that there's some sort of relationship between risk and the amount of time that you have investing. Can you kind of break that down for me a little bit?

Lydia

Absolutely. So, we've got a simple range of options. And the idea here is you can choose from, from that range. Most fund members who come to us will come through their employer and they'll go into, you'll hear the terms default or MySuper. And that's our growth option designed to grow over the retirement journey.

Ange

That’s very aptly named.

Lydia

It is, it is. But of course, if members want to make a choice, they can make a choice. So that's why it's a simple range. It helps you understand. But the idea is the longer you hold those investments, the more potential they have to grow. There's a longer opportunity. So if you want to take more risks because you've got more time for those risks to pay back the expected return, then you can do so.

But you might not want to. You might think differently, or you might not have as long and therefore be more comfortable taking less risk to give you that smoother journey. And it's, it's the trade off.

Ange

Got it.

Andy

Yeah, right. So you've just mentioned growth there, right? The growth option that exists. When I started with Rest, you know, I noticed that immediately I was in a growth option. Do you mind just expanding a little bit on what that invests in?

Lydia

Okay. Good question. So, look our growth option, like all our options, it invests across a huge range of underlying assets. So many, many different individual assets. And that's one of the benefits of investing with a super fund. So your contributions get pooled with all our other members’ contributions. And it means that bigger pool of assets can go and buy more assets, different assets.

Ange

Oh so it's like a collective. So because there's more members and more money in the pot to play with…

Lydia

You get, you also get access to a wider range of investments. Because there's there's more, there's a total pool of assets that's bigger.

Ange

Strength in numbers.

Lydia

That’s the one. So we can talk a bit more about what that means.

Ange

Yeah, that sounds good. I am going to derail us for just a moment, because I did read something that I thought was really, really interesting. So apparently the Australian superannuation industry has a total asset pool worth over 4 trillion, with a, with a T trillion dollars worth of assets right here and globally. Like I just think of that number and like I can't even imagine how many zeros that is. I think it's like nine. I don't know, someone correct me please.

Andy

Twelve zeroes. It was twelve.

Ange

But there's a huge amount of money that's invested. Can you tell us a little bit more about how much of that slice of that pie Rest has, and maybe some of the cool assets that Rest invests in with that money?

Lydia

The super industry in Australia is actually the fourth largest pool of retirement assets in the world.

Ange

That's huge.

Lydia

So, there's a number of super funds available. Rest is one of the largest and we have about $100 billion now under management.

Ange

With a B?

Lydia

With a B.

Ange

Everyone at home listening, that was with a B. That's pretty impressive.

Lydia

The good news though, is when you're that size it gives you size and it gives you scale. And it means you can access great investment opportunities both on the ground in Australia but also worldwide.

Vox pops ----------------

Ange (V/O)

We went and asked everyday Aussies what they thought about this

Sinem

Do you know about how it gets invested?

Person 1

It can either be in, like, I think, like, houses properties or, like, just into a savings account.

Person 2

I'm not really sure.

Sinem

Okay.

Person 3

Don't know. I you know what? Time to review. Time to review. Because I don't actually pay attention to it.

Sinem

Did you pick what investment options you were for each one, or were you in the default investment option?

Person 3

No. A couple I got to pick.

Person 4

I know you got the apps and that, I go and look at my super. I'd go and change and re-adjust and stuff like that. But back then you could also paper. You didn't... I didn't know what was in it, really.

Person 5

I changed supers recently like you could do quizzes and things like that beforehand to work out what was going to be better for you and what was coming in. What was coming out.

Person 6

Sometimes I do the default only. But later on I found that, there's one that sounds more trustworthy. Then I put everything into that one.

End vox pops -----------

Ange

Now I would want to know what are some of those cool assets?

Lydia

Well, the good thing is that those, those assets, and some of them are really interesting, but they're quite often investments that our members couldn't necessarily buy into if they were doing this on their own.

Ange

Got it.

Lydia

So, one of our best-known investments is Quay Quarter Tower or QQT. So that's a property investment. Some of our Sydneysiders might know this. It's a beautiful office building down at Circular Quay.

Ange

That's the pointy one, right, down at Circular Quay? It's gorgeous.

Lydia

Yeah. And QQT has won major international architecture awards, but also some major sustainability awards. Because when it was built, they didn't knock down the old building completely. They actually saved and reused much of the core of that original building and built around it. And that means that…

Ange

It's like a building glow up.

Lydia + Andy + Ange

Yeah.

Lydia

But there's a reason for it. And that's because when you knock down buildings, you actually release carbon into the atmosphere. So by knocking down less, you're able to save a lot of the carbon emissions that would have normally come with knocking down that, that building. That's one of the reasons why the Green Building Council of Australia, actually awarded this a 6 star green Star rating. 

Ange

Well, isn't that a bit of an overachiever? I didn't even know you could have 6 stars, but apparently, you can.

Andy

Yep.

Lydia

That's a tangible asset. That's kind of a built property that you can actually touch and see.

We've spoken earlier about shares and shares or equities. So we also hold those from around the world. And there's some really interesting holdings in our portfolio.

Ange

Tell us more.

Lydia

So just to be clear, these aren’t stock tips, just examples of investments currently in our portfolio. So let’s look at one of them, it’s TSMC.

Ange

Say that five times really fast.

Andy

TSM, TSMN…

Ange

Yeah, didn’t think you could.

Lydia

It's actually the Taiwan Semiconductor Manufacturing Company.

Ange

Still over my head, never heard of it.

Lydia

So, still none the wiser? But if I tell you it's actually a company that makes chips that power a lot of your everyday items that you use. So think phones, think computers, think even cars. So you've heard of companies like Apple and Nvidia?

Ange + Andy

Yes.

Lydia

We may invest in those. But actually this company that we also invest in is behind that modern technology. So, as the use of that technology is growing and the whole world is becoming more digital and AI is having a greater influence on everything that we do, we’re really thinking about this in terms of what we’re investing in. These are just some of the many, many investments we have with it.

Ange

When you say many, like how many?

Lydia

I think it’s something like 2000, maybe something around that, don't quote me.

Ange

That's pretty cool.

Lydia

Because you've got that size and you've got that scale. So there'll be lots of the little tiny, tiny bits, but that diversifies you. So that spreads your risk across a huge range of, of opportunities.

Ange

That's awesome.

Andy

So, asset classes. I've heard of this, I've heard of this phrase. Can you just expand a little bit more on what an asset class would be? Give me a really quick 101.

Lydia

Okay, okay. So look, an asset class is just a fancy technical term for, a group of investments that have similar characteristics. So, behave in, in a similar way.

Andy

Right.

Lydia

Okay. So they tend to behave in a similar way to each other. So we group them into asset classes

Ange

Got it. Okay.

Lydia

You'll hear, often hear us talk about two different types of asset class, so growth assets, and defensive assets.

Ange + Andy

Okay.

Lydia

So I say two. But you can also have some investments that have characteristics that are both growth and defensive. So shares. Shares are considered a growth asset. Cash is considered a more defensive asset. Property has characteristics of the both, so a mid-risk asset is sometimes a term you'll hear.

Andy

Yeah.

Ange

And so what's the difference between growth and defensive?

Lydia

So growth is called growth because it's designed to grow. But in order to grow it's likely to take more risk. So it could grow, but there's a risk it may not grow and maybe even have a negative return. Defensive assets tend to give you more stability. So they may not give you as high a return, but their prices or their values are likely to be more stable over time.

Andy

Yeah.

Ange

I'm just going to unpack that for a second. Why would I want my super to grow more slowly? Like to me, I mean, what would that reason be? I can’t get my head around it.

Lydia

It's a really good question. But when we create our investment options, we're mixing together different blends of growth assets and defensive assets. They combine.

Think of it like baking a cake, putting all the ingredients from, from a recipe into to come out with that cake. That's what we're trying to do with investments.

Ange

Cakes are something I understand. We can talk cakes.

Lydia

Okay. So growth, our growth option is called growth because it will have a tilt towards more growth assets. So I think between 60 and 75% of it will be what we term growth. And that tilt to growth means that, over the long haul, it's got the potential to grow more than an option that is tilted more towards defensive assets. But of course, higher potential returns come with taking on higher risk.

Ange

So if I was to use the cake analogy, it's like mixing or changing the ratios of the ingredients. So if you like your cake more fudgy, you'll increase the amount of cocoa. But if you like your cake more dry, you'll increase the amount of, I don’t know, what is it…. flour. So it depends on what your, your preference is.

Lydia

But all your ingredients are needed to make the cake.

Ange

Make the cake. Yeah.

Lydia

So all, but all investments will carry some risk right, okay.

Ange

So even cash carries some risk.

Lydia

From low to high, different levels of risk. But if you don't have that risk then you also don't have the opportunity for the return. So think of two sides of the same coin.

They come hand in hand. So it's not that risk is something to necessarily be scared of or worried about. It's your personal comfort with how much risk you want to take in order to get a chance of your desired return outcome.

Andy

Yeah, some people like skydiving. Some people like lawn bowls.

Ange

I like skydiving, we're going skydiving after this.

Andy

I like lawn bowls. We can go lawn bowls after sky diving.

Ange

What a shame. (laughing)

Lydia

And look, our members. We talk about what we call the risk-return trade off. And it's exactly that. They're deciding how much of each they're comfortable to take.

Ange

Yep. So some of us will jump out of planes, and some of us will roll balls on a lawn.

Andy

With friends.

Lydia

Generally, investments that have higher, longer term return potential will come with higher risk, over the short term in particular. So the reverse is true as well. The lower risk or the defensive asset classes like cash, typically offer lower longer-term returns. So why would you want it to go more slowly? It's about the journey and the path that you want to take.

Ange

And probably the time as well that you've got left before you retire I assume.

Andy

Yeah. So before I picked up that you said there's different options, right? So I guess there's like higher risk options or less risk options. Most people just fall into the default, I guess, right from the get go. So I'm more curious to know what investment options that Rest does have to choose from. And can I make a choice?

Lydia

Absolutely. Yeah. So Rest has a simple investment menu. We've got nine different options on that menu.

Ange

It's like nine cakes.

Lydia

Like nine cakes.

Ange

A whole patisserie out there.

Andy

Delicious.

Lydia

Like, which cake do you want?

The idea is that each of those will have different risk and return profiles. So you can choose between those. Think of it as the nine cakes. Hopefully there's one in there that you might like.

Ange

I’m going to be thinking about cakes after this. Oh, God.

Lydia

So you've heard us talk about the growth option, the default. But there's other options. So another one we've got is sustainable growth. So if you want an option that has a higher allocation to growth assets, sustainable growth might be suitable for you, particularly if you want your super investments to also come with enhanced environmental, social and governance characteristics.

So if that appeals to you, that's an option that you may wish to choose.

Ange

And if you're like a skydiver like me, what would I be interested in? Do you have any, like super high growth?

Lydia

Probably one of the best ways to learn a little bit more about them is check out the, the online tool that we've got and work out which option suits you as a skydiver, or you as a lawn bowls player.

These tools, they provide general information so it's not personalised to you. It won't take account of your personal objectives, but it'll give you an idea and information on what may be suitable to your needs.

Ange

And just shameless plug, I believe that Rest offers it to its members at no additional cost.

Lydia

It does, it does. Yep.

We've also got a range of tools to help you understand more. So lots of quick, simple, easy videos, articles. You can find those on the, the Rest app. There's a section called learn if you want to go and find out a little bit more. They’re bite sized chunks. You can do as many or as little as you want. If you're interested in finding out more of that information. That's a really good starting point.

Ange

Awesome, we'll put some links in the chat, in the show notes. Yeah.

Andy

Yep. But also in the chat.

Ange

In the show notes, that's what I was trying to say. Yeah. Not the chat. What chat? There's no chat. Maybe there is a chat. We should start a chat.

Andy

We'll put the links in the show notes.

Ange

Thanks, Andy.

Andy

I feel like there's so much more to unpack. I think we've kind of just barely scraped…

Ange

The tip of the iceberg.

Andy

The tip of the iceberg. That's mixing metaphors, but it works for me. But, yeah, barely scraped the surface. And I think there's so much more to get into. And I'd love it if you'd be willing to come back and maybe chat a bit more about different investment options that we have, you know, let's get into it.

Lydia

Thanks, guys. It's been a pleasure, and if I can even just help simplify some of those myths and make it easier for our members to understand what their super's doing on their behalf, and for them to make a choice and be comfortable in the actions and the choices they make. Yep, more than happy. If you just learn a little, it can just help increase that comfort level.

Ange

Well, that was it. That was contractual, right? Like it's on camera now. We’ve got her locked in.

Andy

Locked in. Lydia’s coming back. Yeah yeah yeah yeah.

Ange

Well thank you so much for joining us today Lydia. I thought today's episode was really interesting and I learned a lot myself. So I really appreciate you giving us the time.

Lydia

And a little tip, if you don't actually know what investment option you're in, jump onto the app. Have a look.

Ange

Well, as always, if you liked today's episode, please make sure to leave some comments below like subscribe.

Andy

And that's.

Ange, Andy, Lydia

Super simple.

Monique

But just quickly, what's your most important asset?

(theme music starts)

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Ange

Welcome to Super Simple Chats. Rest's very own podcast. We will be speaking to industry experts about all things super. Trying to make it understandable and relatable for everyday Aussies. After all, it's one of the biggest assets you'll ever have.

Ange (V/O)

We're recording this podcast on Gadigal land. We pay our respects to elders past and present.

Any advice you hear on this podcast is general in nature and doesn't take into account your financial situation, needs or objectives. Issued by Retail Employees Superannuation PTY LTD. Before deciding to join or stay, consider the relevant PDS and TMD at rest.com.au/pds.

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Alex

Have you ever looked at your super balance and thought, is this good? Is this bad? Do I have enough? My name is Alex and I'm here with my co-host, Jo.

Jo

Hi. And we're here with Monique from Rest.

Monique

Hi, Jo. Hi, Alex. Thanks for having me here.

Jo

Pleasure. Thank you for being here. Today we're going to be unpacking a question that probably if you if you've been a bit nervous to Google, which is: “Do I have enough super at my age?”

Alex

I'm definitely too scared to Google that. I mean, I've just come back from parental leave, so who knows? (laughing)

But as you can tell, this is the lowdown. This episode is all about super balances.

Jo

Yeah. And we'll be unpacking some sort of personal factors, like things like what are your retirement lifestyle goals? What's your age at the moment? Do you think you'll own your home by the time you retire? Do you have a home now? Things like that that make it a bit more unique to your situation.

Alex

Absolutely. All right. So let's dive right in, Monique, with that big scary question. How much super should I have at my age if I'm 25? 55? Is there actually a perfect number to have?

Monique

Yeah. Great question, Alex. And I get asked this all the time. And I love this question because it really gets to the heart of why super can feel so confusing.

I mean, asking how much super I should have is like asking how much to save for a holiday. So what kind of holiday are you going have? Are you going to have like a five star resort holiday at the Maldives, or do you prefer backpacking or camping around Australia? Are you going to go yourself with a partner or a big family? And then you're going to consider, how long am I going to go for?

And yeah, a week or even a month. Super is very similar to that. So you got to consider where am I going to retire and how long do I have. And then you've got to look at things such as my goals, my objectives and most importantly, what your retirement lifestyle is when you want to retire.

Jo

Yeah. Okay. So there's quite a lot to unpack there isn't it. Because if it's not about a perfect number, then what are some of the key factors that we should be thinking about?

Monique

Yeah. So it is best not to think of as a perfect number and instead think about when do you want to retire, you know, how old are you now and how long do you have to retirement and how long you've got to save for that retirement?

And then when you retire, you got to think, what's my life expectancy? Because it's got to last you. Sometimes it could be 20 or 30 years. So you need to use that money for and then you got to consider, am I going to do this solo? Which is absolutely fine, and some people prefer that. What am I going to have a partner to share my expenses with?

And then you're going to consider things such as debts, you know, do I have any debts? I mean, the modeling is mostly based on no doubt, but, you know, not everyone can afford that kind of luxury.

So, things that you might consider is I'm going to be supplementing with age pension. Do I have other sources of income like an investment property or shares or, a lot of people go out and do part time and casual work just to supplement that income.

And so finally, it's really your retirement. What you want in your retirement. ASFA has these benchmarks that are a good starting point. But everyone's retirement goals are a bit different. I've got people who've said to me, oh, I want to go travel around the world when I retire, I'm going to spend $100,000 a year doing that. I'm like, great, good for you.

Yeah, most of us, like my parents, just want to stay home, do a bit of cooking, do and gardening. And you know, then you have a look and say, right, if that was the case, then have a look at your baseline. Maybe I don't need that much when I retire, but if you do want to travel and spend $100,000 a year travelling, you will need a lot more in your super.

Alex

It makes a lot of sense. Yeah.

Jo

So it's quite clear then it's like there's no one size fits all when it comes to this is there?

Monique

No, it's different for everybody. That's correct.

Alex

And you mentioned ASFA benchmarks, what actually is ASFA, what are these benchmarks we could think about.

Monique

Yeah. So ASFA is the Association of Superannuation Funds in Australia and they've developed this, retirement standard. So this retirement standard is a benchmark for the annual budget for the average Australian to live either a comfortable or a modest retirement lifestyle. And they do change it accordingly every quarter.

Alex

I assume there's a bunch of caveats to that as well. Like, maybe you need to own your own home or anything like that. Yeah?

Monique

Yeah. There are certain assumptions, like being debt free, owning your own home, and there's different figures if you rent a property or own your own.

Jo

Yeah. Okay. Because I'm kind of have the question in my mind is what do you mean by comfortable or modest in retirement. Like that's quite.. broad.

Monique

Yeah. So comfortable is a good standard of living. So think, you have the top private health insurance cover. You've got money for social activities, hobbies, going out for restaurants. And then you've got money to go on a domestic trip, every year and maybe one overseas trip every seven years.

Jo

Yeah. Okay. Sounds good.

Monique

And then we have a modest retirement, which is a basic standard of living, which is slightly above the government age pension. So you've got basic private health insurance cover. You might not have as much money to go out for social activities or restaurants, and you might have to travel domestically.

Jo

Yeah, okay.

Alex

I mean, the modest lifestyle sounds like me right now. I'm trying to save for a home.

Jo

Exactly.

Alex

And I think we'd all love to have a comfortable lifestyle in retirement. That's probably not that realistic, is it?

Monique

Yeah. And, that's exactly right. So these are just benchmarks. And think of it as benchmarks. And it's okay to be above or below.

Actually, only 30% of Australians are reaching this comfortable lifestyle or above.

Jo

Wow.

Monique

I mean, it's a good starting point, for you to think about what balance you want. And really, life happens. I mean, you've got family, you've got work, you've got kids. You sometimes think, oh, I'm so busy. You put super on your backburner, I mean, not everyone's going to think about what they're going to do with their super in 20, 30 year’s time. So that's normal. But the good news is, yeah, there's a lot of strategies, no matter what age you are, to help with your super. Say, for example, you're thinking you're going on a career break, having a baby, you know, think about the government co contribution. Are you eligible for the government co contribution. Or, you know, get your spouse to put some money into your super, do some spouse contributions if you’re lucky enough.

I don't know if you had that conversation with your husband, Alex, but… yeah so think about that. And if you're nearing retirement and your kids are out of the home finally, and you've got more disposable income, you paid off the mortgage, think about salary sacrificing, or maybe a transition to retirement.

Vox pops ----------------

Ange (V/O)

We went and asked everyday Aussies what they thought about this.

Sinem

When do you want to retire?

Person 1

Now. Now.

Sinem

Do you think you’d have enough?

Person 1

I think I do. But, I'm still young at heart. And I've got so much to give, so it's not going to happen.

Person 2

He's nodding at me, saying, we’re good? So I’m like, okay.

Sinem

Do you compare your balance to other people your age to be like, okay, we're at the benchmark?

Person 3

Yeah, yeah, we're definitely over the benchmark. So yeah, I'm looking 55, I’ll be backing off, considering… we should be definitely tracking towards that.

Sinem

Yeah. Nice.

Sinem

Did you have kind of an ideal age that you wanted to retire by?

Person 4

Well, I had an accident in 2009. I had no idea I was going to retire really early. And it's just the way it is. But you've got to be. You've got to take care. You've got to balance your money because money is tightening. You don't get any more.

End vox pops -----------

Alex

You know, that's very relevant, as you just mentioned for me, because I've come back from parental leave and now I'm working part time, but I'm very conscious that I'm not earning the same amount that I used to. Obviously, and not the same amount is going into my super, and that's probably playing a big factor into my final balance right now, isn't it?

Monique

Yeah, absolutely right. So this the good news is the super and the pay gap is closing. So that's fantastic. But unfortunately there's still a lot of roles and industries where women are paid less than the male counterparts. And it's also because women are seen as a primary caregiver of the family.

If you think about it, you know, 30s and 40s, that's when you really start to see your super balance grow. And that's because you're getting older. You're getting paid more at work, and you're seeing the benefits of the compounding effects over a long period of time. But that's also when we decide to have children.

Alex and Jo

Yeah. Yeah.

Monique

Yeah. I mean, I had my first when I was 35 and my second when I was 37. So that time out of work really impacts my super balance.

Jo

Yeah. And I think it's probably quite familiar feeling for anyone, regardless of whether they're a parent or not. That feeling of am I behind? Because, you know, I'm obviously from the UK where we don't have the same super industry in the UK.

And you know, I came here with nothing essentially. So at 27 I had no super and I had to learn what super was and all these things. And so I've always felt like I'm behind because I think all those years when I was earning money as a younger, you know, kid and a younger adult are gone. So I can understand that feeling of feeling behind. So I guess the people like us worrying about that sort of feeling, what could we do?

Monique

Yeah, and that's so common, Jo. I mean, everyone's a little bit different. The journey is going to be different as well. I mean, you came a bit later and you're super started late. You've got people, I mean, my husband started working when he was 16. I started working when I was 23. So as you can imagine, our super would have been a very different balance when when I first started.

And then we've got a lot of other reasons as well. But, you know, the important thing is to keep track of your super and just to make sure that you've got, you know where it is.

Jo

Yeah.

Monique

A lot of people that I speak to, they don't even know where their super is. And that's because they said, oh, I do know that my employer is putting money into my super, but I don't know where. So, keeping track of it is very important.

Alex

And they could have multiple accounts open. I know when I was young I would have just started a job. They opened a fund, started a job, they opened a fund. You don't have a clue when you're younger.

Monique

Oh, it's so easy to lose track. I mean, if you start on a new job and they open a new fund, I mean, I've seen people five, ten, you know, it could even have 15 super funds. I think the most I've seen was 12.

Jo + Alex

Wow (laughing)

Monique

So it’s quite common. But you consider things such as, you know, the different fees that you are paying. I mean you could be paying multiple fees and costs that you don't need and insurances as well that you won't need as well. So consider consolidating it together.

But before you do that, make sure you tick all the boxes, make sure that you check everything that you've compared with such as the, the fees, and the costs and the insurances that you might lose or any other benefits.

Jo

There's quite a lot in that, isn't there. So it can feel a little bit overwhelming. You know, I know when I first started working at Rest about six years ago, I didn't know very much about super, bit embarrassing to admit, but it's true. And I think most people in Australia would actually say the same.

Alex

Absolutely.

Jo

Really, how much do you know about super, it's so complicated. So one of the things that I found really helpful was that we have an online tool called the Super Health Check for Rest members, where you can log in and answer a few simple questions, and it will give you a checklist. And that for me, I'm a very visual person. So for me that was really useful place to start. But I guess, should we talk about a little bit more of sort of other things, strategies that within that health check or things like that we could think about?

Monique

Yeah. Yeah. Good point. I mean, there's other things that, you know, a lot of people should be considering with their super. Such as, have a look at where your super is invested. If you don't choose where to invest, you're super automatically goes to what's called the default investment option. Every fund has their own default investment option, but a lot of other options available to you as well. They range from being very conservative all the way to high growth.

And depending on your circumstances, such as, you know, how many years before retirement, what your goals are or you know, your risk profile, like how much risk you're willing to take in your investment, is where you should sit in your investing. And it really could make a difference to how much you have in the long term when you retire.

Other things to consider is insurances, as well. I know we've done a podcast previously about that, so I won’t go into too much detail. But just quickly, what's your most important asset?

Alex

My family.

Monique

Yeah that's exactly right. And you want to make sure that they're looked after. So you, yourself and your ability to earn income are the most important assets. Because if something was to happen to you, you want to make sure that you've got money to pay for medical bills, rehabilitation, your mortgage. And then if you do die, you want to make sure your family's looked after as well.

Also, beneficiary nominations is important as well. I know we’ve done a podcast on that as well. So, make sure that's in check.

And finally, consider topping up your super. I mean, I know it is a cost of living crisis at the moment, and people are struggling, but every little bit counts. So when you put say, you know, $5 a week into your super, it can have a compounding effect in the long run.

Alex

That makes a lot of sense.

Jo

It does make a lot of sense.

Alex

I mean, there's so many things that we're all subscribed to that if you just kind of cut one of those out and considered, what would this change my balance if I put this into my soup, I'm like, that probably would be significant.

Jo

Yeah. And you don't necessarily have to be able to afford to do something every week. It could be just every now and then when you have a little bit of extra cash, you think, okay, I'll just tuck that away.

Monique

Yeah, that's right, I mean, we, we buy coffees every day, which is like $5 every day. If you add it up every week that’s quite a bit. I mean, even if you give up one coffee a week and put into your super that could make a difference.

Alex

And you’ve got oat milk, almond milk, it's probably an extra dollar.

Monique

A small one’s, like $6. It's not cheap these days.

Alex

So keeping all that in mind. And now we know there's not a perfect number to have. But if I wanted to know with my current balance, if I am on track for those lifestyle goals, I want to have, my life expectancy, etc., etc. Are there any other tools or calculators we can use? It's like, is there AI software that can do this for me?

Monique

Yeah, I mean that's that's a great question. And it can be so helpful to have these tools available, isn't it? Because you're like, well, what figure should I have? If you go on to the

Rest website under Tools and Advice, we've got these calculators that you can use. And they're fantastic because, I can spend the whole day doing it, to be honest. They look at your current balance, your age, your contributions, and then you can play around the figures. Say you want to retire at 55. What's that going to look like compared to 65?

Jo

Yeah.

Monique

If I change my investment option, how much would I have? Higher or lower? And then that looks at retirement budget as well. So it will show you if you were to retire, what lifestyle you want, how much you need per annum and how long the money's going to last. So it's a real handy and useful tool.

Jo

Yeah. It makes it feel a bit more tangible doesn't it.

Monique

Yeah, yeah. Brings it visually to life.

Alex

I find those so useful. Like, here is your projected balance that the trajectory you're going on. And when I was in my 20s, it really helped me to get my mind around, okay, this is probably something I should care about, and here's how much I could have. And then you could adjust, like, if I paid a little bit more into it, how much would that grow or not? And it's been. Yeah, a really interesting way to kind of understand that super is important.

Monique

Yeah, it's actually really fun, especially for us super nerds.

And then we've got other options as well, such as the ASIC retirement planner, also they're fun to play with as well.

But, most importantly, I can't recommend highly enough. Go and speak to an advisor. We have advisors at Rest but a lot of super funds have their own advisors, and they're real people that speak simple language and you can relate to. Rather than doing it on your own, get someone to help you.

Jo

Yeah. I couldn't agree with that more because when I joined Rest as well, I did speak to an advisor and I was pretty nervous because I was like, oh God, I'm going to sound so stupid. I've just started at this company I don't want to sound like I don't know what I'm talking about, but they just made me feel really comfortable and there were no silly questions. You know? They were really, really human, like you said. So, I always recommend that to people, too.

Alex

Yeah, my mum recently retired, and in the lead up to it, she was asking me so many questions. And even as someone who works at super, I was like, I do not have a clue. Maybe you should speak to someone who can give you some advice. And she found the process incredibly helpful as well. And like you said, it wasn't particularly intimidating and they just helped the average Aussie to just get a bit more of an understanding about retiring.

Jo

Yeah.

Monique

I've only had fantastic feedback about them and there's no stupid questions. I mean, even if I have a small balance, it's not embarrassing because that's the whole goal of seeing them. You need help and that will help you.

Jo

Yeah, yeah.

Alex

Oh, thank you so much for your time today, Monique. I feel like we've really demystified a bit of the legend of needing a specific amount at 25 versus 55. Is it $1 million? Is it nothing like… I feel a little bit more reassured.

Jo

I do too, like knowing that there hasn't got to be a perfect number. And if we are a bit behind, there’s lots of things we can do to catch up.

Alex

Absolutely. And if you like this episode, please like and subscribe. And that's..

Alex + Jo

Super simple.

Matt

Tick those three boxes, and you’re on your way from a super perspective.

--------- Theme music starts

Ange

Welcome to Super Simple Chats. Rest's very own podcast. We will be speaking to industry experts about all things super. Trying to make it understandable and relatable for everyday Aussies. After all, it's one of the biggest assets you'll ever have.

Ange (V/O)

We're recording this podcast on Gadigal land. We pay our respects to elders past and present.

Any advice you hear on this podcast is general in nature and doesn't take into account your financial situation, needs or objectives. Issued by Retail Employees Superannuation PTY LTD. Before deciding to join or stay, consider the relevant PDS and TMD at rest.com.au/pds.

---------

Andy

I don't know about you guys, but starting any new job is both the most exciting and terrifying time for me, from remembering everyone's names to getting across the ins and outs of my role. It's scary, and that's from my perspective as an employee. I can't begin to imagine what it's like for an employer. I'm Andy from rest.

Chrissy

I'm Chrissy

Matt

and I'm Matt.

Andy

So today, we're going to be sharing some tips and tricks. We just want to make things as easy as possible for our employers to get their team started off on the right foot. But first, Matt, can I just say season three and you're joining us again?

Matt

Yep, it's pleasure to be back. I mean, I can't believe it, so I must have done something right in the first two seasons. So it's good to be here.

Andy

I feel like you're the number one star of the podcast outside of you know, the hosts like…

Chrissy

He's not a host?

Andy

Yeah, big surprise.

Matt

I'll take it. Maybe I can host one of those, see how we go season 3. I could be in your seat, next season. So, see how we go.

Chrissy

He’s after our jobs.

Andy

Let's kick this chat off in a general sense. I've worked at a few workplaces and Chrissy and Matt, I just want to get a feel from you about your past workplace experiences when you were starting out. Can you guys tell me, who did it best and what they did that made you feel special?

Matt

Yeah, look, I think, I mean, look, I've actually been at Rest for 10 years now, so I'm just trying to think back to when I first started at Rest. But I think one of the things that really stood out and it stood out in some other workplaces as well. I think when I was younger, I worked in retail, fast food, worked in a retirement home, so whole variety. And one of the things that really stuck out across all four, including Rest, was being allocated a buddy, whether that's like an informal buddy where you sort of have monthly catch ups, or it's an informal buddy where they just sort of take you under their wing. So I think the difference between, sort of a buddy and, you know, having a boss or a manager or, you know, that small business owner that's trying to show you the ropes is, it's a peer, and that really just sort of helps you get settled in. And in most cases, that buddy ended up being my buddy outside of work as well. So, you know, it's one of those things that just makes you feel more comfortable at work. And as I said, that sort of level playing field, I think that was one of the best things that I probably had at various workplaces across various industries. So that would be something I would suggest to employers, to take note of.

Chrissy

Yep. No one wants to eat lunch by themselves on the first day.

Matt

No, definitely not.

Chrissy

I've also been at Rest for like seven years now. You know when I think about starting a new role, and I think about all the paperwork and the forms that you have to fill out, I think something that would make me feel really special is just doing that alongside my favourite pack of biscuits.

Andy

Yeah. So simple, easy, yeah, right, like you just pop your biscuits down and

Chrissy

Cup of tea. Yeah, dunk and go.

Andy

The most British response we could have.

Chrissy

We're really easily pleased.

Andy

I also kind of feel like, you know, seven years, right, since you started at Rest, it is really easy to forget what that's like. I remember, for me, when I started my very first job, there was, like, that excitement and fear that I talked about at the top of the show, right? This feeling of, I'm gonna do well, but am I gonna like, you know, I'm gonna get a mess this up. Am I gonna do something wrong here? And that first feeling of like, Yes, I have a job. I can save up for my first car. And then all this paperwork came through, like you said, and I remember being, what does any of this mean? Like, at 16, you're looking at ATO forms and these big, complicated documents, and you're not 100% sure what they are. So if you're an employer, what are the things you can do to keep things simple for both yourself and your employee when you kick off?

Matt

Look, it can be quite intimidating. I think back to any job that I've probably had. You know, whether it's my most recent job, but all being 10 years but particularly when you're younger, that first job is pretty full on. So there's so much going on in your brain, right? So, you know, when you're a new starter, like it seems really basic, but, you know, make sure your employees understand, from a super perspective, what it is they're getting. And I think from, you know, if I think about yourself, Chrissy, you know, not being born in Australia, I'm sure you were probably thinking, you know, what is this? Is that something that you know, fell into your life when you started working.

Chrissy

I remember, so I don't remember my first job, but I remember my first job in Australia, and I remember looking at my pay check when it finally came in, and getting and seeing this line on it called super. And I remember going to them and being like, what is this? And all that was kind of told to me was, it's your super, you'll get it when you retire. And that was the amount of information that I kind of got.

Matt

Yeah, and it's, I mean, it's the same for me. I think, if I think back to my first ever jobs and getting paid super, particularly as a youngster as well, you know, you sort of do see super on your on your pay slip, you don't really understand. So having that sort of information upfront would be so beneficial. And I think from both an employer's perspective and an employee's perspective is beneficial because, you know, you don't have your employee sort of, you know, feeling like they're being underpaid or not being, you know, from an employer's perspective as well, it's like you've given that, then that opportunity to understand what it is as well. So super can seem complicated. So anything you can do to sort of help your employees, and then obviously help yourself too, it's a win, win.

Chrissy

Yeah, even just pointing them to the fund website, something as simple as that, so they know who they’re with.

Matt

Correct, 100%

Matt

If it's not the fund website, you know, there's, there's plenty of other links, yeah, you know, ATO and employees might go, there's plenty of information out.

Andy

Yeah, such a simple thing, right? Just explaining what it is, it's so easy to overlook those things sometimes. So first step, explain what super is. And then, once you've done that, what comes next?

Matt

Yeah, so the next thing is, is you need to share the super form with them, which is called the Standard Choice Form. And look, if you can do that via email, you know, before they start, even, it gives you a bit of a head start. You know, that employee doesn't necessarily have to fill it out before they start, but sort of sharing all that as part of their sort of welcome pack as an example. And I think the other thing is, you know, just making sure, asking your employee, or any new employee, just to bring along their personal details with them. And I think that a lot of people think, Oh, they would just naturally do that when you got to remember, once again, it's employees first day, they probably put so many things rattling around the head, basic things like the obviously their tax file number and maybe their bank account details, and just knowing their address and maybe some identification as well, it will go a long way. So just sort of prefacing that before they start, you know, just giving them the heads up, I think would make a big difference as well.

Andy

Is there anything that you should be really aware of and really conscious of avoiding in these situations? Is there's a reason why, like, it's just not done with every employer anyway?

Matt

I think, to be honest, I mean, probably is giving any financial advice. Yeah, and it could be outside of super. It could be other products that you have available to your staff as well. But you know, you know, unless you're a financial advisor, which in probably most cases, you probably aren't, you shouldn't be giving any advice. It's very much just factual information. So if they do want further information? Once again, there's resources available. Obviously, we've got plenty at Rest on our website, or, you know, once again, the employees, myGov, ATO, all those sort of spots as well. There's plenty of information where they can get that sort of factual information. Further to that as well, there are financial advisors. Obviously, they can give financial advice as well. That's probably, at Rest as well. We've got a full team of financial advisors available to help our rest members as well. But certainly that's probably the thing I'd be, just to be careful of that you're not sort of pushing people into certain superannuation products.

Andy

Yeah. So, share some factual details, link to the resources that are available online, so that you…

Matt

Spot on, spot on,.

Andy

So I'd imagine this process is sort of similar as well. If, let's say I'm employing like 40 people at once, or something, I'm opening up a new franchise. I don't know if those franchises exist anymore. This is a big, this is one of the big ones. So can you automate it? Can you make it fast and easy for yourself to do this stuff? Is there a nice way and then, without losing that personal touch, I guess?

Matt

Yeah, I mean, look, it really is up to you whatever works best for your business. I mean, it depends if you're a small business, large, you know, whatever. But at the same time, what we've seen be, you know, very successful and work for businesses is they just create a checklist, like an email template, and the more you sort of get familiar with what's on that template that you've created, sharing it with your new starters, receiving that information back and going through that process. The more you do it, the more you're going to get familiar with it. And I think that's just going to help you sort of check off all those boxes that you need to do from an onboarding perspective. So that's probably a really simple way, of just sort of getting ahead of that too.

Andy

Cool. Yeah, awesome.

Chrissy

Make a list.

Matt

Yep. Checking it twice.

Chrissy

Ha, for Christmas hiring season.

So I'm a big believer that first impressions count. And whilst you might not necessarily notice if the onboarding process runs smoothly, you will know you, will feel if it's a bumpy one. So is there anything you can tell me about how to make the first impression count?

Matt

Yeah. Look, I think last time I was on the podcast, season two, I talked about three things that, from a business perspective you need to think about when it comes from a super perspective. First thing is, provide that employee, your employees with a standard choice form. That's number one. Number two is check if you need to do a stapled search, which is finding any superannuation out there in the super universe for any of your new employees that come on board, and thirdly, figure out how you're going to pay contributions. So whether that's through a clearing house, or whether it's through potentially, a payroll software provider, like a Xero as an example. So those three things will just set you up for success, and the more regularly you tick them off in a regimented process, the better is going to be for you. The better it's going to be for your employees. So it's like anything, the more you do, the more more regularly, isn't it a bit of a theme here.

Chrissy

But yeah we’re season three.

Matt

But yes, me once again, going through this again. But once that's… they’re the three things it's so important, tick those three boxes, and you're on your way from a super perspective, both obviously, as an employer, but then your employees too.

Andy

So let's talk about that standard choice form then, like, I know my attention spans kind of shrunk to about the length of a Tiktok…

Matt

Yep, me too.

Andy

… and I know the form is about three pages long, right? Yeah, so what are the things that an employer can actually do to help break that down for their employee?

Matt

Yeah, look, I think this is a big one, particularly for younger employees. I mean, any employee filling out a super form is probably looking at the wording and all those pages going, what do I need to do? So maybe you can just give them a helping hand. You know, there's a couple of sections there, where, as an example, if your employees bring their own super fund across to you, you can point them to that section and ask them where you know to what bits they need to fill out. And the same goes if they want to select your employer's default, your business's default super fund, then you can point them to those sections as well. So instead of them sort of sitting there and potentially fretting and not getting that form back to you, which is, you know, super important information, excuse the pun there, terrible for me. You know, you can really just support them with, you know, what could be just another layer of complexity with some additional forms and paperwork. And depending on what industry you're in there, you may be, you know, incurring a lot of paperwork, onboarding process. So I think that could help them there too.

Chrissy

Nice. We'll pop a link in the show notes to help.

Matt

Yeah, sounds good.

Chrissy

So I remember my first job, and my first day starting my first job was 15 years old. My mom dropped me off going to Tesco to start packing shelves, and it was intimidating. It was intimidating going into the workforce. Is there anything you think employers can do to help ease that?

Matt

Yeah, I think, I think we've touched on that a few times. It's, it's a big day for anybody, particularly if it's your first job, I think..

Chrissy

It’s a rite of passage right?

Matt

It's a right of passage, right. You need to be chucked in the deep end. And I think I was 15, 15, years old, my mom dropped me off at Hungry Jacks. I was, I was on my way and

Andy

Good luck, watch out for the fryers.

Matt

I had to use the phone at the Hungry Jacks to call her to come pick me up because I didn't have a phone.

Chrissy

Yeh same, I’ll meet you here at 7, okay?

Matt

And somehow it worked. You know, that's just the way it was. But I think, you know, so it's real, but I think just provide reassurance to your team members, that’s probably the first thing, they're all very nervous, apprehensive. And the second one, just offer support where you can as well. You know, one thing I've seen, you know, at certain workplaces, it's just like a nice little onboarding pack or a little tote bag, with a few bits and pieces in there, maybe it's got, you know, if you are working in fast food or retail, you know, it's got some other uniform in there, or some just other, nice water bottle, a notepad, you know..

Chrissy

Some little merch, some branded merch, with some Tim Tams.

Andy

Yeah, get those Tim Tams in there.

Matt

Maybe we need a sponsor of Tim Tams, just a heads up, is it Arnotts? Might be Arnotts.

So I think, yeah, it's, you know, basic stuff like that. Can just make a big diff… and it keeps, you know, it makes, it's you makes you're off to a good start, you know, with your employees, by doing stuff like that too.

Chrissy

But you can also slot in information about their super fund within that.

Matt

Of course, yeah. I mean, look, we can probably provide a link or something, or some information as part of the show notes here, but we've got some very simple, sort of one, two page flyers, which just talk about the real basics, which I'm sure you know, just sliding it in that bag with all the other stuff.

Chrissy

This is what it is. This is who you're with, this is how you find out more information.

Matt

Exactly right, yeah.

Chrissy

Stops those questions then coming back to the employer.

Matt

Definitely, 100%

Andy

This might not be the platform for venting, but I do need to vent real quick. I once worked with an employer who got my tax file number right, but they didn't quite line up any of my other personal details, like they put in my nickname, the address they put in was their business address and not my business address. Fast forward to a few months later, and I realized that there's a new super account that's receiving my super also being deposited into another one that's not quite the right one. So Matt, I know why, but can you tell me why it's so important for a business to get their employees details right, and will it impact them down the line if they get them wrong?

Matt

Yeah, it's pretty annoying, right? I totally get it, and I've seen it look. I've been working in Super for a while. And basically, you know when your employee onboards, and you know, we receive a standard choice form or the contribution details through a file, whatever's on those, you know, on those on the contribution file, we're going to set up your employee as a Rest member or whatever super fund they are with those details. So we've seen a lot where employees will, for whatever reason, put their employer's work address as their personal address.

Chrissy

That's actually not, I can imagine doing that as well.

Matt

So look, I mean, it could just be that, you know, little stressed on day one, you’re in the environment. So, but what does that mean from a super perspective, it means any comms moving forward, any letters statements to that work address, and it's probably unlikely that you're living there at your work as well. So some real basic things you can do as an employer is just spend a bit of time when you're receiving details from your employee personal details, just to make sure that they're putting in the correct details, because down the line as well. From a employee's perspective, if they're looking to potentially consolidate their super or update their details, it may be a little bit difficult if we don't have the correct details on file. So having it from day one, it just makes a big difference, and spending the time as an employee just to make sure, will help you out as well, from an employer's perspective, too.

Andy

I mean, just to add a story to that, essentially, where mine ended up was that I needed to go take my identification to a police officer and get it verified that I was actually me before they could consolidate my super into the correct account.

Matt

Yeah, it makes sense. Look at the date of birth is a huge one that we've seen in the past as well, just getting the month and days round the wrong way as an example. And same thing, you go to do anything, you know, update your account date. You can't verify yourself. So just that verification. And you know, your identity is a very important thing, particularly in this day and age. So just getting that right, I can't stress, it's probably one of the biggest things, and I've just seen it so many times. And it's just from a little check that’s, it’s so easy to check from the employer's perspective. So, that would be my advice to is any business, any employer out there, is to just spend a bit of time just to make sure that you're getting these details. I appreciate if you're a large business, probably, but maybe having some checks in place will support you with that.

Andy

I mean, payroll is like the competency, yeah, that's how I think about it with my workplace, it's they're not getting my payroll. I'm scared. I'm nervous about some stuff, you know?

Matt

Correct.

Chrissy

So we spent a bit of time talking about the employee and how we can make them employers can help make them feel at ease. But I want to flip it and think about the employer. So you're you're running a business, you've got a million things to do. You're onboarding a new team member. Is there anything Rest is doing to help with that?

Matt

Yeah, there’s a big thing coming into the super world for employers called, and employees, called Payday Super. And Rest, as part of that, has launched a new clearing house called Rest Pay which is, super simple, compliant with Payday Super, really easy for you to use as an employer. So, really excited that that’s out and available for our employers to use now.

And look if you ever get stuck for, from a Rest Pay or contributions processing perspective, we do have a new employer contact centre available Monday to Friday, and that can be contacted on 1300 305 775, Monday to Friday, there to support you with any of those contributions processing for your team as well. I think further to that as well, can I give my team a little plug?

Andy

Oh yeah, go for it.

Matt

I did on season 2, and it managed to get through as well. So my team as well look, we look after employers that are basically looking to join Rest, and need a little bit more information before they make that decision. But part of that is discussing Rest Pay and potentially, you know, onboarding. So you know, you'd be more than welcome to reach out directly to directly to my team as well, which is... can I…. The little plug is, our email address is supersolutions@rest.com.au.

You'll actually be hearing from myself or my colleagues as well, directly and my team. So sorry team, if I didn't give you the heads up on that, but we might be getting a few calls. We'd love to speak with you.

Andy

Yeah, you get the world-famous Matt Balderson podcast Season one, two and three.

Matt

Just quote podcast, season one, two, and three, you’ll get my attention straight away.

Andy

You get a special deal. No, you won't… we’ll think about it.

---- note: no vox pops in this episode

Chrissy

So we spent a bit of time talking about some of the things that employees get wrong contact details. But what about some of the things that business owners need to watch out for? I know that in retail, for example, a lot of people work overtime. Do you have to pay super on overtime?

Matt

Yeah, look, in most cases, no, you don't actually, as an employee have to pay on overtime, but supers paid on what's called ordinary time earnings, or OTE, as it's known in the biz, commission and bonuses do count as OTE, you know, so you'll have to factor that into into super saying that all this stuff is quite nuanced, and I think we could be here for some time going through the it checklist. But, you know, I'm sure we could just pop it in the show notes.

Andy

Yeah, we'll definitely put a link to that in the show notes, because there's a few different caveats in there as well.

Matt

There is plenty, and I'll probably get myself in trouble.

Andy

Yeah, yeah, we don’t want to get you in trouble, we want you back for season 4.

Chrissy

Is there a calculator that helps employers?

Matt

Yeah, there is. And it can, it can just be located on our Rest website.

Chrissy

Yeah, perfect.

Matt

You know, there's, there's plenty of support online.

Chrissy

So we won't do the math. They can do it.

Matt

Yeah, correct.

Chrissy

Is there anything else that you think employers need to know?

Matt

Yeah, look, I think, keep in mind there's plenty of support available to you at Rest. I've now given up my team's email address live on the podcast. But look, on our Rest website, there's a business help center, there's plenty of support available. So just keep that in mind before you make any decisions. We're here to support you.

Andy

The big message is that Rest is here for their employers.

Matt

100%

Chrissy

Awesome. So to recap, if you're an employer and you want to think about how you can make onboarding easy for you and your team. You want to create a simple onboarding process.

Matt

Yeah, that's right with the with the templates and checklists that we talked about.

Chrissy

Secondly, get a payment platform.

Matt

Yeah, Rest employers will have access to a new clearinghouse called Rest Pay. So that's something you may want to consider as well.

Chrissy

And then finally, know the difference between OTE and overtime.

Matt

Exactly, you got it.

Chrissy

I'm ready,

Andy

Absolutely ready, to start our own business, take over the world, start paying super. Oh, it's so exciting. Okay.

Matt, thank you so much for joining Chrissy and I on today's podcast. I feel like every time you're on here, I learn something new. And I think it's always so good to have someone from an employer team, point of view, come on the pod and talk to employers about what we can offer them. I do feel like, when you are an employer, sometimes it feels like you're on your own, yeah, but it's really solid to know that I think Rest is like coming from the internal side of things, from what I can see, really feels like Rest is there for their employers.

Matt

Yeah, we love supporting our employers, and yet, thanks once again, for having us on season three. It's always a blast doing this. So, cheers.

Chrissy

And as always, if you like today's episode, leave us a comment or like and subscribe,

Andy

And that's…

Andy, Chrissy and Matt

Super simple. 

Pete

There's probably no bigger change in your life after 50 years of doing the same thing.

Alex

Yes.

---------

Ange

Welcome to Super Simple Chats. Rest's very own podcast. We will be speaking to industry experts about all things super. Trying to make it understandable and relatable for everyday Aussies. After all, it's one of the biggest assets you'll ever have.

Ange (V/O)

We're recording this podcast on Gadigal land. We pay our respects to elders past and present.

Any advice you hear on this podcast is general and doesn't take into account your financial situation, needs or objectives. Before acting on any advice or deciding to join or stay, consider its appropriateness and the relevant PDS, FSG and TMD at rest.com.au/pds. Product issued by Retail Employees Superannuation PTY LTD.

---------

Alex

Picture this. You're in your late 50s, early 60s, and you've been working full time your whole life, and you're starting to wonder, “Do I really need to keep doing this five days a week?” Maybe you want Fridays off. You want to travel, see the grandkids, or, you know, start a new hobby or I mean, let's be honest, maybe cost of living means you need to keep working, but it's getting harder. The good news is you're not alone. My name is Alex, and I'm joined today by my co-host, Andy.

Andy

Hey, Alex. And today we're joined by Pete from Rest.

Pete

Hey, guys. Thanks for having me back.

Alex

Pleasure to have you.

Andy

Mate, so good to see you. Always good to see you.

Pete

Thank you.

Andy

So, here's the lowdown. You don't have to go from full time to full stop. Today we're talking about how to slow down a little by reducing the number of days you work each week without stopping entirely. We'll explain what's called a Transition to Retirement strategy, or TTR, when you can actually start accessing your super while still working. And what this means for your take home pay and retirement savings.

So how can someone slowly transition to retirement? Can you still really access your super while you’re still working?

Pete

You actually can, Andy. The good news is you can. So if someone has reached 60 years of age, which is called Preservation Age, and you are still working, you can use a TTR strategy, a transition to a retirement strategy, to scale back work or downshift.

If you think of a car analogy, you know, when you're driving a manual car and you change from fifth to fourth to third to second, you know, it's a bit like changing from five days a week to four days a week. So, you’re downshifting. But you can use that, that TTR strategy to maintain the same level of income.

Alex

Okay.

Pete

Or even, to boost your super if you wanted to.

You know, of course, there are limits on what people can access.

If you've reached Preservation Age, as I said, if you reach 60 or over and you're between 60 and 64 years of age, there's minimums and maximums that you can take out. So the minimum is 4% of the, of the balance that's in the account and the maximum is 10% of the balance that's in the account a year.

So you've got a fair range there. And for those lucky people who are 65 or older, they've got full access to their full balance.

Andy

Yeah.

Pete

So there's that… 60 to 64 range. That's 4% up to 10%... a year.

Andy and Alex

Yeah.

Pete

And then you've got the 65 and over.

Andy

Yeah.

Pete

Lucky people who’ve got full access to the whole shootin’ match.

Andy

I feel like as well like, just to get things up top really quickly, there is going to be a lot of nitty gritty right, in this stuff. I can imagine that we're talk about like lots of details and stuff like that. Right?

Pete

It is.

Andy

If you're listening to this pod and you're interested in it, and you want to get into that detail, definitely visit our website and we'll pop some links in the show notes to make sure that you can get the details if you want.

Pete

Yeah, exactly. There's plenty of people at Rest to to help talk you through it. So we really want people to reach out so that we can guide them through all the, all the jargon, because there's lots of it.

Alex

Yeah, 100%.

Alright, Pete. I'd love to know, what are some of the reasons that people downshift into retirement.

Pete

Look, first of all is, you know, for financial security or financial stability.

Alex

Yep.

Pete

Okay. So, for some of us, who may still have school fees to pay, you know, or may still have financial obligations like a home loan or debt or whatever it is, then they perhaps just can't afford to drop, you know, a fifth of their wage if they're moving to four days a week. So they know they need to maintain that same level of income. And I probably count myself in that group. That's one reason that someone else might want to do it.

For emotional and social well-being. You know, it's a massive transition.

Andy

Oh huge.

Pete

A massive life change moving from, you know, 40, 50, 60 years in the workforce, to life after work, you know, it's a major life change. The purpose and the structure that work gives us isn't easily replaced. And if you, all of a sudden just sort of take that away, like, go from five days a week to nothing and take that whole structure and purpose away then that affects people, not the best way sometimes. So doing it gradually, it can be a much more, a healthier way to do it.

Andy

Yeah.

Pete

I guess it gives more time for, to do the things that you love. You know, spending time with family. You mentioned it before, spending time with family, hobbies.

Alex

Yep.

Pete

We talked about pickleball before the before, the pod, you know. Those things that you dream of, that when you're, you're getting a coffee at work on Wednesday morning at 10 a.m., you know, you're going oh, what else could I be doing today?

It's a bit of try before you buy, because, you know, you might think that. Oh, yeah, I'd like to take up this particular hobby or I'd like to let's, let's use the pickleball example again. You know, so taking that one day extra per week, you know, moving from five days to four days.

Andy

Yeah.

Pete

Gives you that day to maybe try different things, and establish that as either: Yep. I really want to continue doing that or maybe that's just not for me. And I'll try something else.

Andy

Yeah.

Pete

Before you get to that full time life after work, all that full time retirement.

Andy

You might get that chance to try pickleball and then be like, wait, this is a cult.

Pete and Alex laughing.

Andy

I'm not sure this is 100% for me.

Alex

Sounds like something someone from big tennis would say.

Pete

Big tennis.

Andy

Oh, yeah yeah, yeah. Or big, lawn bowls perhaps.

Pete

Nothing wrong with lawn bowls.

Alex

But on that note, do you think that there is a bit of a stigma around retirement?

Like for some people, retiring or retirement is a dirty word?

Pete

Yeah, I, I do feel that way, honestly. Alex, it's, it's a real label. It's almost like it's a.. it's a bit of a sentence.

Alex

Yep.

Pete

And I think maybe some of our friends and family in older generations have, been constricted because of that label. You know, if you think of what the word retirement is, it's it sort of means the end. You retire from cricket, you know, you finish your innings at cricket, it’s over. You retire a racehorse? It's career is over, you know, put it out to pasture, and and that word has those connotations of the end when really, in my personal opinion. And look as I, as I read this, there's, there's some other amazing people in the, in the public space talking about these things, you know, retirement is more of a transition period. You know, it's a period of adjustment, like you're moving from full time life and work to full time life after work. But you’re still living, okay?

I think a lot of people sort of, maybe when they retire, they got a bit of… they feel like they've got a tattoo on their forehead that says I'm retired. And they get pigeonholed into, you know, no longer offering value or being productive or having purpose. And that's just not true. And that's really unfair. Maybe ageism comes into a little bit there where people get labelled.

Alex

Absolutely.

Pete

So, you know, I, I agree, Alex, I do think it's a bit of a dirty word these days. And, and, you know, thinking about it in, in the terms of life, in work and then simply life after work is, is a much more, perhaps positive and optimistic way of looking at it.

Andy

Yeah, for sure.

Alex

It makes sense, though, in that sense that you'd want to transition in some way because I mean, for me personally, I've just come back from parental leave, and if I went from parental leave to full time work, which a lot of people have to do, it can be very challenging. So I've been lucky enough to come back part time to make that transition a little easier. And I, you know, that's the same thing for retirement.

Pete

Yeah. Exactly. Right. Exactly right. And you know, this this this period of life is very near and dear to my heart because I'm about to have a milestone birthday next year and I'll be right in the middle of this cohort. So, you know, adjusting me, you know, thinking about these things and considering what life after work is going to look like and, and how to get there, how to move through this period is, very relevant to me. Let me tell you.

Andy

Yeah your 30th birthday is a big one.

Pete

Whoah, I wish Andy, that's you more than me my friend, you more than me.

Andy

Okay, so let's say I have managed to access to some of my super, right. How does this help me work less, like, why… why do I get to take more time off?

Pete

If I use myself as an example and I have a… I have a I've decided, yeah, it's time. Like, I've talked about these things for so many years, it's time for me actually to to walk the talk and stop talking about it and actually put some things into action. So I would, you know, you'd have a chat with your employer, I'd have a chat with my boss and say, look, this is what I'd like to do as of, let's say for argument, the 1st of July next year. Okay. So plan ahead. Plenty of notice. And that means that I might move from five days a week to four days a week. So my income's going to drop by a day.

Andy

Yep.

Pete

So I suppose you know, 20% of my income it's going to drop, which is natural, somewhere around 20%, maybe less if I speak to my boss nicely.

In the meantime, before that date starts, I would, get help to start a Rest, transition to a retirement pension account.

Andy

Yeah.

Pete

So I'd move some of my super, into that new account, so I'd have two separate accounts. And then on, on the particular day after that, that 1st of July, when I go to four days a week, that account would start paying me an income stream to top up my pay.

So you’re just topping it back up again. And using your super or a little bit of your super to do that each year, each year to top that up.

So, with that income stream, your, your transition to retirement account is just, helping you maintain that similar level of income. But you're dropping a day or you're gaining a day on your weekend if you look at it that way as well.

Andy

Can we put it into like, let's just give an example, right? Let's, let's pretend there's a dude named Sam. Can you just tell me how Sam would actually do this?

Pete

All right, so I've got a few details here, so if you’ll excuse me I'm going to refer to the notes so I get this right. But let's say Sam he's working in retail, so he's working as a retail supervisor, and he's on $60,000 a year, okay?

Andy

Yep.

Pete

He's working full time and after 40 years in retail, which is a fantastic career,

he’s feeling the physical toll and wants to move to four days a week. Okay. So that would normally mean that Sam's income would drop from $60,000 a year to $48,000 a year.

Andy

That's that 20%.

Pete

That's the 20%. That's the day, the equivalent of a day's income a week. That's right. Now, let's assume that Sam's got $250,000 in super.

Andy

Yep.

Pete

So a nice healthy balance. And they start a transition to retirement account that pays Sam $10,000 a year. All right, so he takes out that's 4% of that $250,000.

Alex

Yep.

Pete

He's not even using the maximum, he's just using the actual minimum $10,000 a year. So Sam's income now becomes, goes back up to $58,000 a year.

Andy

Yeah right.

Pete

So if you recall he was on 60 drop to 48, and then the pension income is helping him get it back up to $58,000 a year.

Alex

That makes sense.

Pete

So, pretty similar. All right. So pretty close to what they were earning before. But now Sam's got Fridays off.

Alex

Amazing.

Pete

Alright, so Sam's a very happy person. And importantly, the employer is still paying super on that $48,000 income.

Alex

Amazing.

Pete

So his super is still accumulating.

Andy

Yeah.

Pete

Obviously the example with Sam, it's just a general example. Okay, so you really need to speak to an expert for some, some personal advice.

Andy

For sure.

Pete

So yeah, just a general example.

Working in the in the role that I do, I work with a lot of employers, who deal with us at Rest. And I know there's lots of great employers that are happy to have those conversations with their team members these days because they recognise, they recognise that the transition is.. it's a it's a heavy weight to carry for a lot of people who don't know what to do. Now, I'm lucky. I've spent, you know, quite a few years working in super, so I’ve got a bit of a background and have a bit of an idea of what I'm doing. Not everything, but a bit of an idea. But a lot of people don’t, right, it’s a big burden.

So there's a lot of employers out there that are happy to have those great authentic and, you know, kind conversations to try and work together and move people through into into life after work in a in a positive way.

Andy

Yeah. Yeah, I remember that. Like finding out what TTR meant and and just being like, oh my gosh, this is such a sweet thing.

Pete

It's gold. It really is. You know, and I'm super excited because it's.. yeah, it's well, as you said, I'm turning 30 next year.

Andy

Yeah. Yeah. You’ve got a while to go..

Pete

But it's close.

Alex

Well that's why we do these episodes because it's something that I didn't know about before I started working at Rest. And then you hear something like this and you're like, wow, that actually could be something I could do or consider if it works for me.

Andy

Yeah.

Alex

But I mean, that being said, though, I do need to ask, is there anyone that this wouldn't suit? Like, is there a someone that this might not be the best option for?

Pete

You know, those people who, through whatever reason, have very, very low super balances.

Andy

Sure

Pete

Okay? So they're not going to have, you know, looking at Sam's example to, Sam had a balance of $250,000. They might not have anywhere near that. So, you know, by starting a transition to retirement account, that might not work for them. Okay?

I suppose there is people that their lifestyle or their commitments mean they need, they need more than the than the maximum 10% that's allowable under a super legislation to take out of their pension account. In between those, you know, 60 to 64 years.

And then there's those who might be, you know, 65, 66, 67 getting close to full retirement. So they, they, they might feel they just they're not going to transition. They're just going to go straight to full retirement, okay?

Alex

Yep.

Pete

So it might not be worth their time either. But you know it's always great to speak to a specialist. You know we have some great Rest specialists who can talk people through it and help people navigate their way to see if, if it is something that is, is viable for them.

Alex (v/0)

We went out and asked everyday Aussies what they know about this.

----- Vox pops

Sinem

Would you ever consider working even when you're retired? Like having a part time job?

Person 1

Yes. Because, as a nurse, I want to keep stimulated. So I don't want to have the brain just shut off.

Sinem

Do you think that you would just transition to retirement slowly?

Person 2

Yeah, slowly. Yeah, just, just earn a bit of dollars here and there, but I definitely, won’t be working full time. Hopefully after 55, everything keeps tracking the right way.

Person 3

I feel like I get bored, so I feel like I'll still do stuff I like to be doing. Daz is like, nah, I'm gonna ride my jet ski all day. I'm gonna go to the beach every day.

Young Person 4

Well, I haven't even got a job yet, but when I get enough money that I know I'm going to be okay to stop.

Person 5

I wasn't planning to retire ‘til 64. My mother was still running a daycare center when she was 86.

----

Andy

So after choosing your strategy, what if I decide I want to fully retire, I can I just, like, stand up and declare it and go, I'm done. I'm… I'm ready to go. Let me let me go home.

Pete

I'm out

Andy

I'm out.

Alex

The ATO is always listening, they just write it down.

Andy

Yeah, just send them an email, CC them all in all staff. You know. Is that how it happens or is it, or is it… what happens?

Pete

You can look, as long as you're over 60. Right. And you have stopped working. Full time, or you've resigned or you've you've told your you've told your employer, you've retired and you've left that work. So you've ceased an employer arrangement. Is the, is the correct jargon in super world. You can access your super fully. All right. But that's, that's very conditional. As I said, you've got to have turned 60 and you've got to have left that employer arrangement. Alright?

Alex

Yep.

Pete

Then you've got full access to your super if you want it. Okay?

Andy

Yeah.

Pete

Then if you are, you can also access super if you're 65 or over, as I said earlier. That's automatic and that's whether you're working or not

Andy and Alex

Yeah.

Pete

Alright. So that's there's a number of numbers in here I know it gets a bit confusing sometimes. And then if you've… you're on your TTR strategy and once you turn 65, it automatically turns into a Rest account based pension.

Andy

Cool.

Pete

All right. And keeps on paying you that income, which you can adjust at any time. That's really important as well. So, you know, some people use the TTR strategy for a few years. Then they fully, fully retire when they're ready. Others might want to keep working part time indefinitely, you know, if you're enjoying what you're doing and it works for you, it gives you that nice balance between, you know, purpose and free time. Keep going.

Andy

Yeah.

Pete

Which is… would be a really nice place to be.

Alex

Absolutely.

Pete

But, you know, others might just want to, enjoy the extra income, from their super… this is it's really important to understand there's no one right way to do it. Because for all three of us in this room, you know, it's going to be different. We're going to do want to do it different ways. In different times.

Andy

Yeah.

Alex

Absolutely. I mean, my mum, when she reached that age retired immediately and was happy days for it. Whereas my dad, I could tell he still wanted to keep pottering about and then ended up filling that time with as many other things he could do, like gardening and taking care of grandkids. And I mean, I know an 80 year old who still running his own business. It's different strokes, for different folks.

Pete

Exactly right, I know exactly right.

Alex

Let's be honest, this sounds almost too good to be true. What is the catch here? Like, is there anything we need to keep in mind? Any mistakes you could make along the way? Like…

Pete

Yeah. Great question, great question. Because, you know, people are naturally, they have a little bit of scepticism. It sounds too good to be true. So it's really important we address that. So I guess it's really important to, to remember that, you know, you start accessing your super at 60. You know, every, every dollar you take out now is a dollar that you don't have in retirement, in full-time retirement. Or as I said before, full time life after work. You know, so it's not growing either, you know, that money is..

Alex

But you did mention that, you're still like, your, your employer is still contributing to your super in some instances. So for some people, they could still be seeing a return.

Pete

Yeah, well, I say that with a disclaimer, you know, assuming the markets are kind to us.

Alex

Of course.

Pete

And our great friends in the investment team keep doing what they've done so well for so many years. But, you know, people will think that way. It is like you say, if they say moving from saving, saving, saving, accumulation, accumulation all our lives, which is…. isn't that true? That's what we're taught. We're told to… look only buy it if you really need it. And I keep saving, keep accumulating. And then it's that massive shift to spending. Right? It's, you know, that's huge.

Andy

Oh, yeah, yeah. I knew a guy, so basically it was a story that came through my, my extended family, but, someone had been putting money in the walls of their house, and they only discovered it after, that person passed away and his wife was, like, walking around the house, just finding wads of cash and things in like biscuit tins and stuff like that. Well, this guy's been saving his whole life. And they were so frustrated because they were like, we could have spent this. But obviously someone who had it ingrained to him just to keep accumulating no matter what.

Pete

Yeah.

Alex

I guess that's a retirement plan for some people buried under the mattress. Yeah.

Pete

Yeah. Well, what are the interesting places that you could have money?

Andy

Yeah, yeah.

Alex

That's a whole other podcast.

Andy

Yeah, yeah, yeah yeah

Pete

That's incredible. Yeah. Look. But you know that that's been conditioned into us to save, you know, prepare for a rainy day. You know, there's there's all those cliches that we've been taught over the years.

Andy

Yeah.

Pete

I guess the other thing to go back to your point, Alex, on, you know, is there a catch? if someone does start a transition to a retirement account, they've got to make sure that the money left in their super account, their accumulation account, which is still going, they've got to make sure there's enough money in there to cover their insurance premiums.

Alex

Yeah.

Pete

If they have insurance. So that's really important. You want to make sure that, you know, if if you've got a demonstrated need to have that insurance cover, then you know, you've got the enough money in that account to cover those premiums. And I suppose as, as we talked about before, some people need more than that 10% limit, like the upper limit of the of the transition to retirement account payment, that 10% can be a bit restrictive for some people and it just yeah, it might not work for them.

Alex & Andy

Yeah.

Pete

Not sure that's a catch. But you know it's..

Alex

Worth considering.

Pete

All things to consider.

Andy

Absolutely.

Alex

So it almost sounds like that this idea of retirement isn't exactly what it's been sold. I mean, growing up, for me, it was this idea of, you know, the nanna’s walking on the beach and and, like, maybe playing a little bit of a bridge, but it doesn't seem like that's the case. Not looking at my parents.

Pete

Yeah, yeah. Well, I hope it doesn't look like that for me. You know, that's that's that's not the the lifestyle that, that I'll be looking forward to is, look as good as bridge is. I'm, I'm sure, and, you know, never stop someone from crocheting a blanket, like, you know, go your hardest. Whatever your… whatever your interest is. But, you know, I'll be, you know, I'll be looking for some to continue enjoying, you know, things like live gigs that we talked before. I've heard of this great concept, you know, where they've started doing, nineties rave parties that start at… start at 2 p.m. in the afternoon.

Alex

Oh, fun.

Pete

And it says, you know, start at 2 p.m., you're in bed by ten. You know,

Alex

Can I do that now? I don't need to be retired to do it, right?

Andy

Yeah. Yeah, yeah.

Alex

And I think if people knew that it wasn't just this, like, boring old fuddy idea of retirement, they might be more interested in thinking about it and actually planning ahead for it.

Pete

Exactly, exactly. And the more we talk about it, and this is a great, great vehicle to do that with. You know, the more conversations we have with our family and friends, you know, more gets out there. So exactly right.

Andy

I've noticed with you Pete, every time we talk about this, there's something that lights you up and you get really passionate about it. And what I'm curious about is like, what is it that that makes you so passionate about? Why are you so eager to get people across this?

Pete

Okay, so, I guess for me personally, it starts with my dad. My late dad. He retired. Sort of. His role was made redundant, I suppose, and he retired at 57. Okay? And back in my early 50s, so long ago, you know, that really worried me. I was really super anxious about that. Because, you know, I saw what that did to him. Now, he didn't go off the rails or do anything silly. He was a lovely man. And, we miss him dearly, but he lost all his purpose at 57.

Andy & Alex

Yeah.

Pete

And, you know, that's not old, right? And he wasn't ready to retire. So, fortuitously, I, attended a conference one day that was facilitated by a lady, who with her, along with her husband. And we were sitting in the back of a cab heading to Sydney Airport, and she's sort of, you know, swapping stories. She'd facilitated the conference and and she sort of… what do you do? What do you do? You know what what sort of things are you up to?

She said, oh, I've got this program that we're sort of launching through the local council network in South Australia. So I said, tell me more, tell me more. And, she told me about mindset for life. And it was all about speaking to people who are getting ready to retire or had just retired and want to make the most of it from a, from a, a physical and mental wellbeing perspective.

Alex

Wow. Okay.

Pete

Nothing to do with the money. All right. And that really sort of flicked a switch in my head, because I knew that my transition to retirement, you know, after going a hundred miles an hour for 45 years or whatever the number is for 50 years, I knew that was going to be a massive, massive challenge for me mentally.

Andy

Yeah, yeah.

Pete

And so, I did the course. So I enrolled, and I did it through my local council and, where some volunteers from that group presented. And I came out of it a changed person. It really opened my eyes to think I can, I can sort of intentionally make this happen my way. Yeah. By you know, being aware of the seven ways to wellbeing by being aware of of things called, you know, fixed versus growth mindset, how you approach these things mentally. And it's really benefited me personally, all my way through for the next move, my working life now, because I did this course seven years ago. And I loved it so much, I got involved, I started volunteering and supporting this group as a volunteer. And we, and to this day, still doing that.

And it's, you know, not long after I've finished doing this course, it clicked to go, oh my God, there are hundreds of thousands of our members. Right, in in my, in my professional life at Rest that would benefit from this message.

Andy

Yeah.

Pete

Because we talk to them all about the money side of things. Yeah. The financial side of things. But nobody's talking about the physical and mental wellness side of retirement.

Andy

Yeah, scary.

Pete

Because this transition, this change in your life is probably, a bit hard to say, but there's probably no bigger change in your life after 50 years of doing the same thing.

Andy

Yeah.

Alex

Well thank you again for being here today Pete.

Pete

Thank you so much for having me I really enjoyed it.

Andy

I feel like every time I get you on it's just like gold, all the way through.

Alex

100%

Andy

So stoked that you've come back. Always great stuff.

Pete

Thanks, Andy. Thanks. Thanks, Alex.

Andy

As always, don’t forget to like and subscribe, and make sure you check the show notes for any stuff we’ve discussed today.

Alex

And that’s…

Andy & Alex

Super simple.

Ange

Welcome to Super Simple Chats. Rest's very own podcast. We will be speaking to industry experts about all things super. Trying to make it understandable and relatable for everyday Aussies. After all, it's one of the biggest assets you'll ever have.

Ange (V/O)

We're recording this podcast on Gadigal land. We pay our respects to elders past and present.

Any advice you hear on this podcast is general and doesn't take into account your financial situation, needs or objectives before acting on any advice or deciding to join or stay, consider its appropriateness and the relevant PDS, FSG and TMD at rest.com.au/pds. Product issued by Retail Employees Superannuation PTY LTD.

---------

Andy

Welcome to a special edition of Super Simple Chats. Today, we're sitting down to discuss market volatility and super. With the conflict in the Middle East that is continuing to drive volatility, media headlines and cost of living pressures, many of you are asking what this means for your super and how you should be responding.

Today I'm joined by Rest’s Chief Investment Officer Michael Clancy…

Michael

Hi Andy.

Andy

and Rest’s General Manager of Communications and Community, Sam Baden.

Sam

Hello. Good to be here.

Andy

and we'll be breaking down and answering some of the most important questions we're hearing from members.

So, Michael, I'm keen to start talking about volatility.

Michael

Sure.

Andy

Can you help me understand how a conflict on the other side of the world might flow through to a super balance?

Michael

So, Rest investment options invest in a range of different types of assets. Some company shares, bonds, property, cash, and so on. And so, when conflicts happen, somewhere in the world, especially in the Middle East, then investors get nervous about how that translates into oil prices and other commodities. What that might mean for economic growth, inflation, so on. And so especially at the start of a crisis when you don't know a lot, when there's concern about how big this will be, how long it will last. Investors get nervous. And so, some will start selling assets and that moves prices around. And because we invest in many of those assets all over the world, some of that translates into our members’ unit prices, which drives the value of their accounts.

So, these kinds of things unfortunately happen all the time.

Andy

Right.

Michael

So, when we build our investment options for members, we do so in the knowledge that there will… as long-term investors there will always be some kind of events happen. It could be a natural disaster. It could be, some kind of economic shock. Think back to Liberation Day in 2025. Think back to, early 2020, when Covid 19, hit communities and also financial markets. Or it could be, military conflicts. If you think about, since the Second World War, there have been about 35 different nations state to nation state wars in… so that’s 80 years. So it's nearly every two years on average something like what we’re seeing in the Middle East happens.

These aren't uncommon. In fact they are expected and when, so I said earlier, we design our portfolios with the expectation that something like these events will happen.

Andy

So there's a lot of talk from different super funds and experts reminding us that volatility is a normal part of long-term investing. Can you break that down a little bit more for us than, you know we see these events happen. Can you just tell me a little bit about how it's inevitable and how super’s designed to manage these situations?

Michael

Sure. So, superannuation is for our members’ retirement. It is a long term investment almost by definition. So you need you need to think about your investment, in your superannuation account like a marathon, not like a sprint.

History shows us that there is a long-term relationship between risk and return. And because superannuation is a long-term investment, we have the ability to invest with that long term in mind. Which means investing in assets that can be more volatile from time to time in the pursuit of higher returns, because it’s those higher returns that drive high balances, which drive better retirement opportunities for members.

And so, because that volatility is normal (and) to be expected, when we build our investment options, we designed them with that in mind. So, we are really well diversified,

Andy

Yeah, so we see more risk in investing because of volatility. We can also see bigger payoffs throughout the lifetime of that.

Michael

Yeah. That's that's what generates returns.

Andy

Yeah. Right. Oh yeah.

Sam

It's really helpful actually Michael, for you to talk about this and actually talk about the fact that volatility is normal in investing that that's really helpful, I think.

Michael

Exactly right. Volatility is a feature of long term investing - not a flaw.

Andy

Yeah I mean we've got this beautiful chart here as well. It shows the different dips that you can kind of see throughout history. For those of you who are watching, you can see a graph on the screen now, but we'll also pop a link in the show notes for those who are listening.

So if I was to look at this, I could kind of point to the drops and then go, there's obviously some kind of event that took place. But then I can also sort of see that the market rebounds, right?

Michael

Yeah. And if you were to draw a line through that, you can see that in the long run markets recover - even in the midst of a crisis, you can feel very anxious.

It can feel nerve wracking, especially if the media is reinforcing negative messages to you day in, day out. However, as long as economies recover then markets tend to recover too.

Andy

We know that emotions play a huge role in driving behaviour, right? That's the way that advertisers get you - they get you in the feels. And then, I'd imagine that it would be very similar in people's minds if like, oh no, I'm seeing this thing, it feels terrible, I need to react defensively.

Michael

And I think that's part of our job as institutional investors is to not react to feelings. Our job is to understand history, understand how markets work, not get caught up in the emotional side, not to react, but actually to plan ahead. And to take advantage of opportunities like we see in the markets now. So, you know, there's that old addage of never waste a crisis. So crises are actually opportunities for long-term investors.

Sam

And I love the use of the word institutional investors as well because it does sound a bit boring. Michael, no offense, but that's what we want from our investment teams. We want professionalism. We want people who know what they're doing, you know, with our members’ investments.

Andy

You kind of just covered this off a little bit, but let's go into a bit more. Do investors prepare for volatility? Do they look at what's coming and then get ready for it. And how so?

Michael

I think there's three things I’d call out. First of all, is - I'm very fortunate as a superannuation fund - to be always receiving contributions from members and/or members’ employers. So, we're always investing. And our job is to make sure that whatever we're investing in, we need to make sure that we're getting a return that reflects the level of risk that is in any investment we have. So that's the first thing: making sure that risk and return are well balanced.

Secondly, I mentioned earlier diversification. Some people call it the last free lunch in investment management. It’s making sure that, you know, you don't just have one or a small number of assets, but actually the portfolio is well diversified across a number of assets, so that if something is doing well or pulling any given time, there's something else that is diversified.

And then thirdly, stress testing, the scenario analysis is also very important. It means that we can either run our portfolios through an historical event and see how they would have performed. Or we can imagine scenarios in the future. We can run the portfolio through that just to see what the impact would be on the portfolio. And whether the portfolio is sufficiently well designed that it is robust in those scenarios.

Andy

Wow. So like, you could go let's run this portfolio through an event that took place ten years ago and see how that event would have...

Michael

What the impact would have been on the portfolio and how it would have performed.

Andy

Yeah. Wow that’s amazing, I didn’t know that at all.

Sam

Pretty amazing.

Andy

We hear about diversification a lot too. Let's just break that down. Like, what does that actually mean from a practical point of view?

Michael

Right, so diversification is super important, because smooths out the highs and the lows of individual investments. And as the saying goes, you don't put all your eggs in one basket. And so, by having assets, different types of assets in a portfolio, it makes a lot of sense.

So, a good example is in our Growth option (which is the option that most Rest members are invested in) we are diversified across a variety of different asset classes. As I said earlier, things like company shares, property infrastructure, bonds issued by governments all over its cash, etc., etc..

And if you just take the share market piece, we're invested in over 3400 companies across, nearly 50 countries, across nearly 75 different industries.

Sam

It’s a lot.

Michael

And so the portfolio is really really well diversified in a way that, you know, individual investors just probably couldn't do it themselves. And that's especially the case if you look at the non-public investments that we have. So, part of their investments is in share markets and bond markets that you might be able to access if you're a sophisticated individual, but then the rest of their investments are in non-public assets. Things like property, business buildings of all types, infrastructure assets like airports, or energy generation, utilities centres - things of that nature. Things you just can't invest in as an individual. We're really well diversified with a view to delivering consistent returns – well, as consistent returns as we can

Andy

At a really fundamental level, I guess diversification means that if one thing goes down, another thing might go up, or it might remain the same, or vice versa. Tell me a little bit about why can't I make an investment that the kind of investment that Rest can make? You just you just mentioned that there's some assets that private investors just don't have access to. What does that mean?

Michael

Well, it means... So, for example, we are recording this podcast in the city of Sydney. And so, in the city of Sydney, we are surrounded by large office buildings. And as an institutional investor with over $100 billion to invest, we can buy buildings – whole buildings or parts of buildings. We own wind farms in Australia, we own parts of AI datacentres, we are part of the process of funding the transition to renewable energy. So, these are the kinds of things that we can do as institutional investor. Individual investors just can’t or just don't have access to it.

Sam

And one of the amazing things I think is, that we're doing this, but actually it's our members money. And so they're invested, you know, so our members might not even realise that actually, you know, their retirement savings are invested in these incredible assets.

Andy

And obviously it makes us more diversified than you could be on your own. So, when markets do get uncertain like they are at the moment. - what does the Rest investment team do? What steps that they take in that situation?

Michael

Well, hopefully I've communicated that we anticipate that some events will happen. So, the first thing we do is we don’t overreact. We don't have knee jerk reactions because it is part of our expectations that events will happen from time to time.

Secondly, we do actively monitor the situation. So, to take the example of the current conflict in the Middle East. From the very first weekend when that happened, our team were monitoring a whole range of different indicators to let us know how things were traveling in that part of the world.

Thirdly, we make sure we have plenty of liquidity. It’s in stressed events like this where it's not possible – certainly at the start of the event – to know how it’ll long the last, how big it will be. So, you want to make sure that you've got optionality. And so, by having cash we have optionality and, happily, Rest is a beneficiary of net cash flow for members, which is fantastic.

Sam

I just really want to understand a little bit more about liquidity, Michael. Can you tell us a little bit more about that?

Michael

Sure. So, liquidity is really important because it gives you degrees of freedom. For us, we always have some level of cash as part of our big, diversified investment options. And so we just want to make sure that whether members might need some of that cash, or if members might switch investment options, or investment opportunities present themselves in the midst of a crisis where we can take advantage of it - we have the cash on hand to be able to take advantage.

Andy

Right. And so liquidity is that it's basically that bucket of cash.

Michael

Yeah, it's that flexibility to know you can do what you need to do when you need to do it in the midst of a crisis.

Andy

Yeah. Right. Amazing.

Sam

Thank you. That's really helpful.

Michael

And we do also want to provide members with information to help put, events into context. So I think especially now, as you know there is a lot of focus on the conflict in the Middle East, it's important to remember that whilst there has been some up and down and volatility in the last month, the Australian market is up 14% over the last year. Actually a much stronger result than what you would ordinarily see typically.

The US market - the S&P 500 - is up over 30% over last year. Like really really strong results. And so, the volatility we're seeing today has to be seen in that context. And that’s only one year. The last three years have been great for investors, and over decades as well. It's important for us to try to put things in context so members don't have knee jerk reactions either .

Andy

Yeah. I think it's just important to know this is being recorded on the 17th of April, so if you're listening at home or watching at home, just be aware that that figure that we're using are as of that date and everything is accurate as of that date.

Andy

What should members really be taking away? Do you have any key points that people can take away from the back of this conversation?

Michael

Three things really. One volatility is normal. Volatility is a feature of markets not a flaw. And so, our members on average are quite young. And over the course of your working career, while you’ve got a superannuation account, you probably will go through many events like this, like we're seeing the conflict in the middle east at the moment. So, understand that that's normal.

Secondly, even if our members aren't focused on their superannuation account every day, we are. Me and my investment team are absolutely focused, on what's going on in the world, what's going on in financial markets, what's going on within Rest and the various flows, and making sure that we're doing everything we can to take advantage of that.

So third point is, never waste a crisis. If and when opportunities arise to take advantage of this crisis, we will do so.

Andy

So, Sam I'm going to come to you now. When it comes to the news headlines that we've all been reading, it can make some of us feel like we need to act. I certainly know that I feel that way at the moment. Can you shed some more light on the impact of the headlines and how they might be impacting the situation?

Sam

Absolutely. I think when you open the news or social media and you have a look at it and there's constant headlines that feel, you know, quite serious, and as though big things are happening, I think it's really natural to feel anxious and to feel as though you need to take some kind of action.

I think it's important to remember that when breaking news happens, or there's a particular, you know, a conflict is a great example, or geopolitical forces at play, or lots of headlines about markets, these headlines are happening without us really knowing the full picture.

And really, it's just important to know that it's just a normal part of the media and it's how the media operates. And we really don't know what the outcome is. Oftentimes when we see these headlines.

Andy

Yeah, it's so true. I feel like we're flooded with news and it really kind of switches off.

Sam

It's 24/7. You know there is commentary, there's reporting, there's speculation, and that moves around the globe really in minutes these days. And I think that speed can amplify reactions a lot as well.

One of the ways I like to think about it is really, you know, it's like a live newsfeed during a major event. And so every time new information comes in, you have a reaction, new information comes in, you have a reaction. And now often, all of those little micro moments of having a reaction make you feel really, really anxious.

But actually when you think about those big events, they settle and we get the full picture and often it's not what we thought at all. Sometimes it is, but often it's not really what we thought at all. So, I think it's just: be aware of that's actually how the news operates.

Andy

The story is not complete. It's happening. And it’s being written as it goes. So it feels like bad news gets more on the good news. Is that a fair thing to say in this situation?

Sam

I think it's an important point that news really runs on... it's about dramatic headlines. It's about, varying points of view. And this especially comes out during stressful periods. So, and the other thing is that media often zooms in on these worst-case scenarios to drive more news coverage. So what really is not always visible in those situations is the broader picture in the context. And I think that comes out in kind of, you know, definitely there's a role for media to play, you know, to, to tell that broader context.

Because we're really busy and we login and look at our social feeds and we see headlines here and there: you don't always get the broader picture. Not every headline really leads to a long term change, I think is an important point to remember, too.

Andy

Does bad news affect the markets? Like does it have an impact on how people approach investing or?

Michael

Markets aren’t a generic thing. Markets are actually made up of tens of thousands, hundreds of thousands of individual investors. Sometimes that individual investor is like one person. Sometimes that individual investor is like me and my team -institutional investor all making their own decisions. So, it's a really wide range of inputs that will drive different people, make different decisions, and different media is going to be one part of that. But only one part.

Andy

What does this mean for the markets? Is it the bad news itself, or is it more that there's uncertainty around it that markets don't like?

Michael

So I'd say that the uncertainty is a big factor. As I said earlier, if you're at the start of a crisis events and you don't know how it lasts, how big it might be, what the impact would be. There’s a strong tendency to be very conservative in your response to that event

And so that uncertainty means there's a wide range of possible outcomes, which means you've probably got to take a conservative view.

Andy

COVID's one example that we've been through, right? That's one crisis that truly impacted markets a lot. Did we see the markets sort of remaining uncertain the whole time or do you kind of get more rapid as we went through this?

Michael

This is such a great example and such an interesting example actually, because it was a very unusual event, you know, a global pandemic. We hadn't had one of those for 100 years. And so it was nobody's living experience of how to work through an event of thing like that. The initial reaction in early 2020 in financial markets was markets steeply declined.

But interestingly markets recovered really quickly as well. And it’s one of those situations where if you're taking a short-term view, it's one of those situations because it hadn't happened in living memory (a global pandemic that is). The future was uncertain, which certainly was in early 2020, if you were a short term investor it was very tempting to switch to a safe asset.

However, for long term investors, as it turns out, looking back in history... that was the worst thing you could have done. Because the markets recovered very quickly. And if you just switch out of growth assets into cash you'd be very unlikely a week, two week, three weeks later to switch back in.

There's an old adage that, what matters the most in investing is time in the market. Not timing the markets. And as a long term investors we’re big believers in that. It's time in the market. It's staying invested when others don’t. It's taking advantage of opportunities in the midst of the process. And not having that knee jerk reaction that gets you out of markets after they’ve already declined and then missing the gains from their account.

Andy

Like if everyone had a crystal ball, they'd know exactly when to jump out.

Michael

And while we don't have a crystal ball, we do have, lots of learnings from history. And we do have, you know, lots of experience having lived through many market crisis events over the years to have a good sense of what to do and when to do it.

Andy

With that in mind, what can happen if someone were to suddenly switch to an investment option, like cash, when the market's going through these rapid dips in prices?

Michael

If markets have already fallen and then because of nervousness or anxiety, a member chooses to switch cash, then, first thing you’ve done is you’ve locked in that loss. You don’t automatically get that money back. You’ve moved out of a growth asset class or growth assets into a less risky but lower returning cash option and then you have the challenging decision ahead of you that is do you stay in cash or do you move back to that growth “riskier” asset and when do you do that?

In my experience, most professional investors find those decisions extremely hard. Professional investors who are very experienced and have all of the resources and time involved to make those decisions and find it very difficult. And most don't successfully, consistently get that right. You can always be lucky and get it right sometimes but the ability to consistently get that right is very low.

Andy

So, Sam, given the headlines being the way they are, can you help you break down how a member might want to react? That feeling of "I should jump out” I imagine being common for a lot of people.

Sam

I think it can be very unsettling, and one of the most important things I think, for people to consider is, you know, not to rush into making a decision based on a short-term market move. So, you know, Michael spoken about this, already and I completely agree that trying to time the market by jumping in and out is extremely risky.

Really, depending on your personal circumstances and the options or the option that you're invested in, you probably made that decision based on your own situation, your goals, your timeline. It may be that what is going on in the markets and what you're saying in the media has actually not had an impact, you know, on that.

And so it could be that your current option could be still the right option for you.

And of course, everyone's financial situation is different. You know, people have their own goals, their own financial situation, their own timeline, their own risk appetite. And really, you've got to be led by that. I think that’s the thing to remember for people who are thinking about taking an action.

But of course, you know, this is just general information, and everyone's financial situation is their own.

Andy

But what if someone was just about to retire or already in retirement? Should they be considering changing investment options?

Sam

So it's a really important point. And I would say, generally speaking, for many people, super continues to be invested even after they have retired. Yeah. So that means that even if you are close or into retirement, for some people they will likely have many years left for super to move around after a kind of a short-term change in the market.

Potentially taking an action after a market movement could lock in losses, and then you miss out on the recovery. Again, in general terms. That said, there still can be reasons to consider switching. And we of course have advice available at Rest so people can get in contact with Rest for some general advice.

And we can also connect members to one of our advisors for some personal advice as well. And that information ‘how to contact Rest and be connected to an advisor’, that's all on our website. So, Andy might be worth dropping in the link, to the show notes for

Andy

Our advice team is incredible. I don't know if you've ever sat near them or heard them speaking. They’re so great at just answering general questions and then taking them through questions for their long-term future. So if you are at home and you are on the fence about it, I would say get in touch if you can.

Michael

I think the years leading up to retirement, and the first few years into retirement, are just really important years to do everything you can do to get it right for your retirement future. And getting financial advice, for a lot of people, will make a really good sense.

Andy

I also imagine people might be feeling some extra financial pressure at the moment, Sam. Is that true?

Sam

Yeah. Look, I think a lot of people are under real financial pressure right now with the cost of living. And, you know, we the last thing we want is more of that, to be honest. It does mean that some people do start to think about whether they can access their super before retirement.

And I think it's important to say that in certain circumstances, you are able to apply to access your super early if you are in severe financial hardship. So, super really is for your retirement, and the government actually sets very strict rules about when and how you can apply to access your super before you reach retirement or preservation age.

These rules apply to all super funds, not just Rest. And we have to follow these rules. If people do apply for financial hardship relief. We've got some really clear guidance on our website about this if people want to find out more. But we also have some other options that members could have a look at as well that suggest some other options.

For example, you know, there might be things like government support services or other things, depending on your circumstances, that you could do to try and and kind of help through this difficult period. I'd really recommend putting a link in the show notes to that, Andy as well for, for any listeners.

Andy

Awesome. I'll definitely put a link to the show notes on that. Thank you so much for coming in today, Michael. I feel like it's been so useful to have the chief investment officer come in and talk about the investing strategy and how we manage these situations, and I know I've certainly learned stuff, so thanks.

Michael

Yeah, it's been a real pleasure. So, thanks Andy, Sam. It's been good to be part of it.

Andy

Thanks so much for listening and watching today. And don't forget to like and subscribe to the podcast when you get a chance. And that's super simple.

Felix

It's only been very recently that I've thought about it. And I remember my mum telling me that at your age, time is the best currency.

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Ange

Welcome to Super Simple Chats. Rest's very own podcast. We will be speaking to industry experts about all things super. Trying to make it understandable and relatable for everyday Aussies. After all, it's one of the biggest assets you'll ever have.

Ange (V/O)

We're recording this podcast on Gadigal land. We pay our respects to elders past and present.

Any advice you hear on this podcast is general and doesn't take into account your financial situation, needs or objectives before acting on any advice or deciding to join or stay, consider its appropriateness and the relevant PDS, FSG and TMD at rest.com.au/pds. Product issued by Retail Employees Superannuation PTY LTD.

---------

Phil

Now, my first job was working at a servo. All those memories started coming back to me of like, you know, have I got the uniform. What do I do when this sort of stuff happens? How do I get set up right? How do I fill in the forms? How do I learn all the basics? So today we're looking at that whole thing about starting a new job and the wonderful world of super. I'm Phil from Rest.

Andy

I'm Andy from Rest, and we're joined today by Ineke and her son Felix to talk about how they navigated this period together. Thanks for joining us.

Ineke and Felix

Thanks for having us.

Andy

No problem. I'm going to just kick things off with a super nice and easy one. Can you just introduce yourselves and tell us a bit about, you know, your lives?

Ineke

I'm Ineke and I've been working for Rest Super for a few years now in the marketing team, and I brought along the second of my three sons, he’s the middle son, to chat through all things super. Over to you, Felix.

Felix

Well, I'm Felix and I'm in my honours year at uni, and I currently have three jobs. And yeah, I've got some time today to talk about super.

Andy

Man, three jobs. That's nuts. That's crazy. I work one and I'm tired all the time. I can't imagine what it's like doing, like, all three together. Is that a lot?

Felix

It is a lot. But I'm transitioning from, like, two jobs to now a new job. So I'm about to quit another one.

Andy

Yeah yeah yeah.

Phil

Do they know about this?

Felix

No.

(all laughing)

Andy

Yeah, yeah. Cut cut cut cut!

Felix

Doesn't matter.

Andy

I'm really curious. Like, I think time changes, right? Obviously economic times change. And one thing that I'm really curious to get from you is, is what is it like thinking about your future financially today as a 21 year old who's in his honours year?

Felix

Well, when it comes to thinking about my financial future, it's only been recently that I've kind of switched on and started to think about it. And it's more so coming from my older brother and my parents.

Andy

Yeah, right.

Felix

They’ve really reminded me like, hey, you know, maybe you should create some other savings accounts and do auto direct debits so you don't even have to think about it when you get your payslip, it just immediately gets saved. And then also like pushing towards investing in something. But no, it's only been very recently that I've thought about it. And I remember my mom telling me that at your age, time is the best currency.

Andy

Yeah, right.

Felix

And so, like, these little words of wisdom have really been motivational in me, actually, like, educating myself around finance and stuff like that.

Andy

Was there anything like, do you think there's something that…. my mum told me to do very similar stuff. She was like, I remember the auto balance transfer thing and at 21 I was like, whatever, it'll be fine. Do you think there was anything else that made you go, I actually should be paying attention to these messages. Is there anything in the times where you're like, okay, this matters now?

Felix

Well, probably when my parents were, like, showing me, like how they've actually made money through investing. That's when I went, oh, wow. Okay, this is serious. This isn't just like, like mythical stuff. Like, I don't know, a lot of my friends, I guess their parents don't really invest or anything like that. So it's always just put it into savings.

Andy

Cool.

Felix

Whereas with my family, yeah, they've been investing for quite a while. So.

Andy

Okay, cool. So more of like a I saw Mum and Dad do it.

Felix

Yeah. And then I'm doing, I'm just copying. So yeah.

Andy

I guess my mom didn't maybe I don't know she, maybe she did. But that's a different time.

Phil

It's okay, mate, it’s okay. If only you had this podcast.

Andy

No, I guess that's crazy. I just think it's such a cool thing. We've spoken really briefly on Friday getting ready for this podcast, and you seem so switched on with it and so I’m like, at 21, if I’d have been doing that stuff. I think I spent most of my money on paninis at like the university cafeteria getting like takeaway lunches and nothing left over to put aside. So yeah, it’s a good start.

Felix

I still do my fair share of that too. So, yeah, it's not like I'm putting it all away.

Andy

Yeah.

Phil

Felix, before you started your first job, did you know anything about super?

Felix

I knew very, very little. I knew that it was something to benefit your retirement. That's pretty much all I knew, that you put it away, it's locked up. You can't touch it until you're of age. And then that was it. That's all I knew about super. And then. Yeah, when I started my first job, I remember seeing super and then the ABN number, and I was just. And the member number. And I was like, what is this? I don't know what it is. And that's when I went to my parents with all the questions and how to fill it out and how to, yeah, work around it.

Phil

And Ineke with was that like, yes, this is the moment I was born for… super!

Andy

Yeah. Yeah, yeah.

Ineke

It's tough isn't it. Because I'm so excited for him having his first job and, you know, getting some of his own money. And then we are talking about something when you retire. It's sort of feels like oh they haven't even started and we're talking about the end. So I kept it pretty simple to begin with. In a nutshell, the money is intended to help you save for your retirement. And I also explained that you can either choose your own super fund, or you can go with employer an employer default fund. Most employers have a default super fund. And the other thing I was going to say is, you know, it's something that the employer actually pays for you, so you don't have to pay if you don't want to. It's it's a government. It's mandatory by the government. So the employer actually contributes on your behalf.

Andy

Yeah.

Ineke

But you can contribute as well. His reference at that time was bank accounts. So I said it's it's not like a bank account where you can just take money out. You can tap and spend it, because I think that's the other thing as well. So I just explained it is in there and you can't access it. Until later on.

Andy

So do you remember feeling good?

Felix

I felt great, I was like, they're paying extra, but I don't get to touch it, but I'll get it later on in life.

Andy

Sure, okay.

Felix

I thought, oh, this is really smart.

Andy

Yeah, I'm in.

Felix

I thought it was clever.

Andy

Yeah, yeah, yeah.

Felix.

It was quite clever, anyway.

Andy

I think that has a lot to do with how Ineke framed it. Yeah yeah yeah yeah.

Phil

So I remember with my kids I think, yeah, same thing. It was like a bit of a, you know, abstract concept because it is.

Ineke

Yeah.

Phil

But when you sit down with one of those graphs and you actually play with the sliders and go, if I add a bit here, and then over time and you see it and here's a before or after, I reckon that's the sort of thing. Is that like a similar thing for you, did you see a graph or something like that?

Felix

Yeah. No, no, no I definitely love playing with like, you know, in 60 years time if you put in $100 now, in 60 years time, this is how much you'll get. If, you know, markets follow the trends in the last ten years. No, I definitely played with those. I didn't fully understand compounding interest. I just kind of went, look, money seems to be going up. So…

Andy

So actually, this is pretty cool. One of our industry groups, they're called Super Members Council. They've done some modelling on compounding to figure out, you know, how much it actually adds up to when you retire. So if someone would have worked for 44 years and were just paid the average amount of super the whole time, then up to three quarters of their super balance would be, the effects of compounding basically. The balance would be three quarters of the balance would become that nice fat bit on top.

Phil

That's insane.

Andy

Isn’t that crazy?

Phil

Three quarters of the amount.

Andy

Yeah. So like if you had $1 million in super, $750,000 would be, the compounding... the effects of compounding. So that's why it matters so much to be in there so early and to get that that money growing. Obviously your mileage may vary. Like we can't guarantee that that's going to be the case for everyone. But we'll pop a link into the show notes to the study so that if you're curious, you can read. And yeah, fact check that, it's nuts to me. It's so crazy the effects of what investing can do for you over a long period of time.

Phil

So it sounds like getting your super set up right at the start is… is one of the key ingredients. So, Ineke can you talk us through that whole process that, like getting set up from the start.

Ineke

Sure, well you can with your first job, you can go, most employers will have a default fund, what they call a default super fund. And you can certainly choose to go with them or you can choose your own. And with some employers, you still you can also choose your own. They might have a suggestion. With Felix, we chose to go with our own fund, not with our own fund, but with another fund, I should say. And it was it was pretty simple. We just went online, to be honest with you, and just opened an account with the chosen fund.

Andy

Is it actually that is like, so you just go onto the fund's website and then you sign up?

Ineke

Yep. It's just that, it is that easy.

I guess I should probably know that working in super and writing content for it, but I'm gonna just ask the question. I do know that bosses please, don't fire me. But yes, that's.

Phil

You're safe this week.

Was that similar for you, that experience with having your mum talk you through, you find it pretty straightforward?

Felix

Yeah I did, I mean, I pretty much handed it over to her and she gave me, made me a super account and then I just copied and pasted the member number and all that to my first job. And then that was as simple as that.

Phil

Yeah awesome. Obviously, she gave the disclaimer before you do this and say this is general advice only and doesn't take into account…

Ineke

Of course, that goes without saying. Yeah, yeah.

Andy

So just for my sake, would you ever go to your super fund for financial advice? Would you ever reach out to would that be like a port of call for you at all about investing or anything?

Felix

Probably not. My favourite platform that I used for financial education is definitely YouTube. I really find YouTube videos are really engaging and they're good, like visual representation of like, how to invest. And they show you the process of using potentially super accounts or, any financial. They're really good at it.

But if I was to look at super, sometimes I can check through the app. Because they often have like like infographics on the app. And you can tap through and you can see like the different… where to actually invest, like where to choose your distribution in the super app, whether it's high growth, medium growth, anything like that, which I thought was really interesting. And my mum really helped me with that. She personalized my super account for like higher risk reward growth because I'm young. It's like not I guess as important like risk is less important if that makes sense cos I’m a bit younger. But yeah, no, that was one thing that my mum helped me with.

Andy

I'm so surprised, mum mums feel like a pretty good financial influencer to me.

Felix

Oh very.

Andy

Like you know, that's pretty cool that you did that, Ineke. If you're like a parent at home and you're like, what is any of this stuff? This is crazy. How, how would you suggest parents kind of start wrapping their heads around this to teach their kids?

Ineke

Well, I mean, as Felix alluded, there's a heap of information. You know, you just Google away and there's some really good sites like government sites as well, so that aren't, you know, necessarily going to give you specific advice for one fund or another. Moneysmart is one of those. I actually use that a lot.

Andy

Yeah. We’ll pop a link in the show notes for the mothers and fathers who are listening.

Ineke

Okay. And the other is to talk to, I did talk to some of my other friends to sort of say who might have slightly older kids to sort of say, how did you go about setting your kids up for super? But really, I just did… there’s some fantastic information online and you just sort of, it steps you through. So, yeah.

Andy

Do you have any hot tips for mums and dads out there? Like is there anything that you'd recommend they get their kids into or they think about doing for their children?

Ineke

I guess one of the things that we did do is when they… particularly when they well, actually, before you even had a first job, is to start to introduce a concept of saving.

Andy

Yep.

Ineke

First and then then as super comes on, it's sort of a difference. So you're not trying to introduce too many concepts at once because it is a lot to get your head around.

Andy

Yeah.

Ineke

And just putting a little bit away. But in terms of in terms of setting up super, just go online, check it out. I mean and I did this before AI, so AI is probably an incredible tool these days and just learn about how easy it is actually to set up a super account. It's it's not hard.

Andy

Yeah.

Ineke

And you don't necessarily need to wait for that first job either.

Andy

Yeah. You can do it beforehand.

Ineke

Yep.

Phil

So, the takeaway from this episode just feels like you just need to have like a mum, like, Ineke, parents in financial services and your smarts. But I think that's a good point about you saying that there's so many tools out there available. So one of them is obviously go to your super fund and speak to them and ask them the questions, use their tools and calculators. We have some, by the way. Yeah, jump on all of those platforms, all your trusted suppliers, and sort of piece together what your sort of strategy is, what stage of life you're at.

So for those people who don't have parents who are financially savvy, then there are some really good other options as well. So.

Phil (V/O)

We went out and asked every day Aussies about when they started their first job, how they approached super.

---- start vox pops

Sinem

Do you remember your first day of the job and what it was like?

Person 1

They were pretty nice to me. And it was good. I liked them.

Person 2

I was 14 and I signed up to work at Australia's Wonderland and thinking, okay, it's not just about turning up to work, it's about wearing a uniform and what that means for you.

Person 3

It wasn't too bad because like, the interview was actually pretty chill. Like my interviewer with I was like, really nice. And yeah, it wasn't too bad.

Sinem

How would you have learned about super?

Person 2

I asked mum, who's an accountant.

Person 4

There was no one really there to do it for you.

Sinem

Do you remember if on your first job did you pick like the default, or did you have your own super?

Person 4

Yeah, I definitely did.

Sinem

What about you?

Person 5

Yeah it was default.

Person 1

I think I just pick one of the options they had.

Sinem

Would you guys teach your kids about super and stuff like that when they get their first job?

Person 5

Yeah, definitely. We've already talked about, me and Caz have already talked about self-managed supers and and trust and stuff like that. Just so that the kids have got something when they grow up.

Sinem

Did you go to your dad and be like help me with all this stuff?

Person 6

Yeah.

Sinem

And he’d do all the forms for you?

Person 6

No, I would get my mum to do that because… he's bad with that stuff.

---- end vox pops

Andy

All right. So super entitlements if you're under 18 are different if you're over 18. I'm not sure how many people know that.

Felix

I didn't.

Andy

You didn’t?

Felix

I didn't know that.

Andy

So did you want to explain, Ineke?

Ineke

I'll have a go at expanding. So what I did know there was, was first of all, if you're under 18, you… you're not entitled to super I it's not it's not compulsory, let's put it like that.

And so it wasn't a great surprise because suddenly, you know, they go because he started at 15 or 14 and 9 months, it was going to be a while before he saw any super.

Andy

Okay.

Ineke

However, he did not his first job, but second or third job. The employer did pay super.

Andy

Cool.

Ineke

So if you're under 18, I think the rules go that if you work 30 hours, your employer must pay you some super. But also there are employers out there who voluntarily pay super.

Andy

I mean, that's so crazy to me. I remember I didn't know that until I started here that that was actually the case. Did you learn anything about this through payslips? Was there any moment where you went, wait a minute. Where is… why isn’t this money coming through?

Felix

Yeah. It was a surprise to me because I'd heard all about super and I hadn't seen it on the payslip, for my first job and I was, yeah, I was a bit confused because I made the super account and then I never got super for the first job, so that was a surprise for me. But then, yeah, on the second job I ended up getting super.

Andy

Yeah, getting paid.

Felix

Yeah, they were nice enough to pay me.

Andy

Can you remember like looking at that payslip and seeing all the different items?

Felix

Yeah. I remember my first payslip. I spent a couple hours, I think, looking at it because I didn't really understand why there's so many lines on the page and so many different numbers and different percentages as well for like loading, casual loading. Yeah, and then all these, yeah, little things. Anyway. Yeah it was, it's a little bit confusing, but it was interesting. I did like seeing the money.

Andy

Were there any surprises there?

Felix

Yeah. There was a surprise. I was very happy that I got a little $2.50, laundry allowance, which I, of course, didn't spend on laundry because I had my parents to do that for me. But that was a very nice little payment, I was quite happy about that weekly allowance, so.

Andy

Yeah. Yeah, yeah, yeah, yeah, making the most of it. That adds up for like 12 months. Yeah yeah yeah yeah. That's the good stuff.

Ineke

I haven’t forgotten that laundry fee.

Andy

Yeah. Absolutely. It's time to dock him. Yeah yeah yeah.

Phil

There’s always that fun moment of looking at your payslip and you start at the top. You're like, oh, cool, I get paid this much. And you look at the tax and the, well, deductions and stuff like that. But you see that final thing there. But yeah I think that's the key eh, once again is if you have the app, just being able to track it and make sure that you get paid and all that sort stuff.

It's a good way to kind of just note that you are getting that super coming in.

Felix

Well, it's interesting because actually, so my three jobs that I have, they all pay different times for super. And so my one of my jobs which is hospitality, they pay weekly. And then the other one only pays monthly. So it's interesting to see the different companies and how they pay.

Andy

Yeah.

Felix

And that's another maybe takeaway from using the app as well.

Andy

Yeah I mean that's all going to change July the 1st with Payday Super which is coming in I don't know if you, have you heard of that?

Felix

Yeah I don't know.

Andy

Okay. Yeah. New legislation from the government says that employers have to pay on pay day rather than, three-monthly cycles. Which is good, means it makes it easier for you to follow super and figure out what's coming into your account and whatnot.

Felix

Yes, I agree.

Phil

So I imagine as well as getting your all your super set up, that you would have had some inside, not inside knowledge, but you just know the ins and outs of extra contributions and growing your super, particularly while you're young. So did you talk to Felix about that sort of stuff? Co-contributions, anything like that?

Ineke

I did. I spoke… because sometimes at birthdays he would be given money. Sometimes it was quite a bit of money. And I said, well, you can put some of that into savings. You can obviously go and spend it, but you can also put some of that into your savings.

Phil

Panini’s?

Ineke

Maybe not on panini’s.

Andy

Yeah, yeah… deliciously…

Ineke

And every now and then I sort of said, what about you put $10 or $20 into your super or whatever it might be. So we did, I did he was aware that he could also contribute. And then when I found out about this benefit, government benefit called Government Co-contribution, well, then we definitely started contributing. I did a bit of reading on it. I had never heard of it. And it was, when I got in, when I started working for super and I came across, I went, wow, oh, this is amazing. This is great. Particularly for people starting out, because it's a way to sort of build your balance quite quickly.

Andy

Yeah.

Ineke

Now I know not everyone has money. And you know, Felix, you can put in up to $1,000 to, to get 50% back from the government. But even if you could put in $50 or $100 or whatever it might be to take advantage of it. So I, I quickly acted on that with, not just with Felix, but… and my sons. But actually, I told all my friends.

Phil

Yeah, same same deal, and I, before I worked in super I didn’t know about it because it's not something you research.

Ineke

No.

Phil

But straightaway it's like, oh my goodness, this is great. But obviously there's a lot of conditions around that sort of stuff. So we'll put some links in the show notes to go through all the details. And yeah, obviously it's not for everyone, but particularly it sounds like a really good thing to look into, particularly if you're young and getting started to get that curve sort of up in a sort of a higher angle to start with.

Andy

So with the co-contribution has a way like you put like a certain amount in and then the government gives 50 cents for every dollar. Is that right or is it…

Ineke

Yes. That's right. So gives 50% back, up to a cap, they cap it.

Andy

Okay. The things I could have done.

Ineke

Oh I know well I know and the other thing I was going to say is, yes there's eligibility criteria. I mean it's very… again I went to Money Smart, I think it was, to understand what it is, and it's actually yes you've got to be eligible. But the actual way it's paid or fulfilled is pretty simple. It's not, it doesn't take a lot of effort.

Andy

So Ineke, setting up contributions, was it hard to do, or was it pretty straightforward.

Ineke

No, it was pretty straightforward. Like I said, I've done a lot of reading about it. And I, to be honest with you, I couldn't quite believe how straightforward it was because, you know, normally there's some sort of a catch, but you make the contribution before, it has to be an after-tax contribution. So you make that obviously if you're eligible before the 30th of June. So you could do it on the 1st of June, let's say. And then what what the person in this instance Felix had to do is in July or after the end of the tax year, he just completed a tax return, made sure that the super had the tax file number. Submitted his tax return. And then I think it was about three, maybe four weeks later because I kept saying, have you have you got it yet? Have you got it yet. Can you check?

Andy

Yeah

Ineke

It came into his account.

Andy

Nice.

Phil

So Felix, do you really check how you see this going in your app?

Felix

Yeah I do quite a lot now. Back when my super was like when I was just starting my first job, I had barely any money in there, and it was kind of depressing looking at it because the fees for the account were adding up to the same amount that I was getting back from… the interest back.

Phil

Exactly.

Felix

And so but now it's changed. It's like obviously it's compounding and you really get to see it grow. And I do like looking in, making sure that my employers are paying me super and stuff like that.

Andy

Yeah. Yeah.

Phil

Exactly. And even in like, I didn't notice this because I started doing it recently as well, even checking in on how your investments tracking. So just sort of riding out through the ups and downs that happen. But it's kind of fun to go, oh hang on, I've actually seen it go up with investments, not just with the contributions, so it’s pretty cool.

Andy

Yeah. All this stuff is crazy to me. Like when I was 21, I don't even think, yeah, I would have had an app for my on my phone, but I think I would have just not checked it. I can't believe how good you are. Like, this is nuts to me. Like, oh yeah.

Phil

With my kids, I'm like, when they both started working I’m like, who’s your super, and they're like, I dunno. And I was like, can you find out who it is? And both of them came to me and said, oh, it's actually Rest. I'm like, oh, cool. Have you got the app? Oh no, just get the app. That's all you need to start with, just to make sure you're getting paid track your super and stuff like that and then becomes a bit more tangible. So I think they finally got in there like, oh, this is kind of cool. I'm like, yeah.

Felix

Once you start to see it building and going up, you become addicted to it. That's how I see it.

Phil

Let's turn that into an ad right there.

Andy

Yeah, yeah yeah yeah. I don't know if addiction is a good thing.

Phil

This is the one the one addiction in your life you’re allowed. Addiction to super.

Andy

Yeah. Yeah.

Phil

That’s the tagline for next year.

Andy

Yeah, yeah, yeah.

Phil

We'll get you addicted to super.

Andy

Yeah. I can't get over how well you've done as a parent, Ineke. I feel like, which is a bit of a weird thing to say. Not that it's a surprise. I know you, and I know that you're very good at everything that you do. And I just think it's, it's crazy to me to to know the start that you can give your kids, having worked in super now and having seen it. And I think it's a really great way to model what I would want to be as a parent as well, to kind of give, have kids like Felix, who are smart enough and engaged enough in money to start investigating ways that they can begin to grow their wealth from a really early age. That is an accomplishment, and it's not an easy thing to do. So I hope you feel chuffed.

Phil

Totally, yeah.

Ineke

Well… you remember that. You can tell the others.

Andy

Yeah, yeah, yeah.

Ineke

No, I mean I think the other thing is that, yes, okay. I work in finance and I might have a bit of interest in finance, but actually with all the information and everything's online, it's not a huge effort.

Andy

Yeah.

Ineke

And the benefit for kids, young adults is like you say, it's tremendous. Not big effort. Get started early. You don't have to think about it every day.

Andy

Yeah.

Ineke

You know, and I am still a believer in, you've got to live life. You've got to have your paninis.

Andy

Yeah.

Ineke

Maybe not every day.

Andy

Okay.

Ineke

You've gotta to have your paninis. So it's not about, you know, scrimping on life either, but just sort of putting a little bit away, whether it be into savings, super or investments. So I'm.. and it doesn't take a lot of effort from parents.

Andy

Don't want to play down the parents who are listening and thinking like it is hard, it isn't hard or whatever. You do need to do some reading and to do some decoding, but once you've got it down, I think, yeah, it pays dividends. Ironically.

Phil

There’s our second ad right there, isn't it?

Ineke

There we go.

Phil

And Felix, what would you say to people who didn't have parents who are like, financially savvy like yourself? What should they do?

Felix

You know for sure. Just jump online and you can kind of find it anywhere. Lots of different platforms are available. Lots of good videos and summaries. Yeah, there's heaps of information out there. Really encourage you to have a look. Especially when you're young, because time is the utmost of importance.

Phil

Thank you so much for joining us today. I feel like we've kind of come away going, damn, wish we had parents like you, but we didn't, but we have other things at our fingertips and Felix, thank you so much. You've just been fun to listen to and hear your angle and stuff. And so I feel like everyone out there kind of wants to do things like you're doing it. So thank you so much for coming in.

Felix

Well, thanks for having us, guys.

Ineke

Yeah, thanks

Andy

As always, if you like today's episode, don't forget to like and subscribe. If you have any questions, leave us a comment. We've also got a whole bunch of resources for this episode, so if you want to download the booklet for parents, you will find a link in the show notes.

And that's…

Andy & Phil

Super simple. 

Luke

How’s it looking.

Andy

Uh it’s got 25 data breaches. Is that good?

---------

Ange

Welcome to Super Simple Chats. Rest's very own podcast. We will be speaking to industry experts about all things super. Trying to make it understandable and relatable for everyday Aussies. After all, it's one of the biggest assets you'll ever have.

Ange (V/O)

We're recording this podcast on Gadigal land. We pay our respects to elders past and present.

Any advice you hear on this podcast is general and doesn't take into account your financial situation, needs or objectives. Before acting on any advice or deciding to join or stay, consider its appropriateness and the relevant PDS, FSG and TMD at rest.com.au/pds. Product issued by Retail Employees Superannuation Pty Ltd.

---------

Alex

Scams. We've all been a target at some point. From the dodgy AusPost text we all get, to Facebook Marketplace deals that seem a little bit too good to be true. They're getting more complex every day and targeting your money and your super.

I'm Alex from Rest, and today I'm joined by my co-host Andy.

Andy

Hey, Alex. Glad to be here.

Alex

Happy to have you. And we're joined by Luke. He is an information security operations analyst at Rest.

Luke

Thanks, Alex. Thanks for having me.

Alex

And we're joined by him because today we're asking, are you smarter than a scammer? What do you think, Andy? Are you scam smart?

Andy

I think I'm pretty good. Yeah like, you know, I get all the texts and stuff like that. I know when to ignore them and report them as junk, but I feel like as well, they kind of keep on coming and they kind of keep getting smarter.

Alex

Absolutely. And they're just, they're getting more complex, I find.

And that actually brings me to a cool idea that we found from the UK. It’s an AI granny called Daisy. And her job actually is to waste scammer's time by calling them.

Andy

Yes. Love this, love this so much.

Alex

Should we take a listen?

Andy and Luke

Yeah.

--------- Recording of AI Daisy (used with permission)

Scammer

You can see an application called Play Store. Play Store. P-L-A-Y Play Store.

AI Daisy

Dear, did you say pastry? I'm afraid I'm not quite on the right page.

Scammer

No, no, ma'am, I'm talking about the Play Store application. Play Store, it's not pastry.

AI Daisy

Oh dear, I'm so sorry, I'm a bit muddled. It seems to um… have gone black, is that supposed to happen? How do I get it back?

Scammer

But you can't see anything right now?

AI Daisy

That's right dear. Just blackness, like the night sky. I hope it comes back soon, what should I do?

Scammer

Uh turn on your mobile phone ma'am, turn on your mobile phone.

AI Daisy

Oh dear, let me just check the buttons. I think I pressed something it was so long since I turned this on. Alright dear I'm going to press and hold this button for a moment.

Scammer

Alright, ma'am, if you're aware of that and you don't know how to use your mobile phone… Like if you're wasting our time then you are going to lose all of your money ma'am because somebody is trying to take out your money and we're just trying to upgrade the security.

AI Daisy

Oh I've got the home screen back.

Scammer

Yeah, just open up the Play Store application, ma'am. Try to find out the Play Store, Play Store.

AI Daisy

Oh dear, I see a triangle icon, but I'm not sure if it's the right one. It could be a slice of pie, you know, my eyesight isn't what it used to be. Let me just squint at it.

Scammer

Just try to find out the written icon that says Play Store P-L-A-Y Play Store.

AI Daisy

Oh bless, it's still like, loading. I hope it doesn't take too long dear. Do you have any lovely pastries in your area? I do adore a good scone. If you're interested I could share my recipe for a lovely…

Scammer

Uh, excuse me, ma'am, I am not interested in your recipes, OK?

AI Daisy

Oh dear, you sound a bit frustrated!

---------

Andy

That's so good.

Alex

Yeah, she's great. She was actually created by O2, a mobile network in the UK. So, robot AI for the win? This one time maybe?

Andy

Yeah.

Alex

If only we could have AI granny take all the scams calls for us. Thankfully, we have Luke here instead.

Luke, can I ask you the hard hitting question here? Can we outsmart a scammer?

Luke

Yeah, sure. So. Well, the first thing to know about scammers is they're they have one thing in common. They're all trying to get your money from you or personal information. And that does include your super. So… but the good news is that there are some good digital hygiene habits that can help keep you safe online.

So let's start with passwords. So people often ask me how secure are my passwords. Honestly, the answer is not as secure as they could be. So, especially in today's world with automated tools it can be very easy to quickly guess weak passwords.

Andy

Yeah.

Alex

So, having that same password since you’re 11 years old is not a good idea.

Luke

Yeah, exactly.

Alex

Whoops.

Andy

Basically, what are the things that make your password weak? Would it be using password123 for example, is there common ones?

Luke

Yeah, exactly. So, the… the main areas are a password being too short. Or the use of common words or names. And a big one is password re-use.

Andy

Yeah, right.

Luke

So, if a password is, compromised in one place, then your other accounts might be vulnerable to. So, one thing I’d recommend is using a pass phrase.

Andy

Right.

Luke

So that’s… can be quite simple. It's just a sentence or a series of unrelated words that might make sense to you, but doesn't make sense to anyone else.

Andy

Yeah

Luke

And definitely just ,trying to avoid passwords re-use.

Alex

So, like a Sabrina Carpenter lyric could be a good idea or…

Luke

Uh, maybe that mixed with something else, that could be good.

Andy

Okay, cool.

I use a password vault. Basically, it it has all of my different passwords in it saved so that I'm not repeating them over and over again. I feel like that's what I do. Is that helpful?

Luke

Yeah, that's definitely helpful because they just help you have unique passwords for all of your accounts, so, that’s definitely a good approach.

Andy

I've heard about this thing called MFA. Sounds offensive. Apparently it's not.

Luke

Yeah, well, it's a good acronym and we love using acronyms in cyber security.

Andy

Yeah.

Luke

So it’s another good one to… to talk about. So MFA is multi-factor authentication. And that's another good protection. And basically that involves using a second layer of information to log in.

Andy

Sure.

Luke

So yeah, we use them at Rest to protect accounts. So that's another helpful method.

A final one is, that's often overlooked is software updates. So, it's very important to keep your devices up to date. So, phones, laptops, tablets, these often, you might see install the latest update.

Andy

Yeah.

Luke

It can be quite easy to say oh not now, install later. But…

Alex

Every time, you just tap ignore, and then it’s a few weeks pass and you’re like, whoopsie!

Luke

Yeah, kick it down the road. That is very easy to do. But, these actually often install, security updates to protect yourself from security weaknesses.

Andy

Sure.

Alex

Sometimes I feel like the update is probably let's make the iPhones buttons a little bit sparklier. But you’re saying, sometimes the update is, we’re trying to fix a potential hole that scammers can walk through.

Luke

Yeah. Absolutely. So these often fix security weaknesses. So it's very important to keep these up to date.

Andy

So I feel like James Bond sometimes when I'm using MFA. Like I get to scan my thumbprint I get it to like, read my eyes a little bit. It's pretty cool at times. But there's also this thing which is like an authenticator app. What the hell is that?

Luke

That's a fair question. MFA, what it actually is doing is, so it's multi-factor authentication. So it's using two or more ways, two or more factors to prove that it is you who's trying to log into an account. So, these factors are: it's something you know, something you have and something you are. And the key thing is you need two or more of these different categories. So we all use passwords. That's something you know. And then as you said, the authenticator app that's something you have. So that's a code on an app, or a code that might be sent to you. And then the final one is something you are. So that can be… maybe a bit more of James Bond-y here, with like, a fingerprint scan or a face scan or even a retina scan.

Andy

Yeah.

Luke

And then so, why MFA is so effective is that you need at least two of these. So even if the scammer guesses your password correctly, it's… they're going to need another factor to get in.

Andy

Yeah.

Alex

That's great. So, it's… you know the scammers then have to do a Travolta-Cage style Face-Off just to get into my bank account.

Luke

Yeah, exactly, so it makes it a little bit… a little bit harder to do that.

Alex

Amazing. So if we have all of these amazing ways to prevent scammers, why are we still getting scammed?

Luke

The truth of it is, is that scammers are just getting sneakier every day. And then we actually have seen that, lately a lot of these scammers are targeting super just because it is one of the biggest assets that people have.

So I can give you a few examples of some of the common ones that we're seeing.

Alex and Andy

Oh, yeah.

Luke

Simple things like, someone might contact you and say that they can unlock your super, or can give you early access to it.

Andy

Sure.

Luke

So we've heard about these, but it's important to know these are completely illegal. And it can be quite hard to recover this once you do agree to hand over your details or transfer the money.

Andy

Right. Yeah.

Luke

Another one is, someone might contact you with a great investment opportunity in a self-managed fund that’s better performing.

Andy

Sure

Luke

But often you might end up just transferring money into the scammers account.

And a final classic one is, someone contacts you from… saying they’re from MyGov or the ATO, or they might just be trying to get your details and, asking you to verify your details and eventually they will be trying to impersonate you.

Andy

So I'm… I'm going full James Bond. I've got the code, I've got the app…

Alex

Dodging the lasers…

Andy

….I’ve got the authenticator and stuff. How are they still getting in? Like, it's kind of crazy to me that they can still get into my account.

Luke

Yeah, well, because even if you have MFA, so… they might perhaps guess your password or if they have you, perhaps on the phone or over email.

Andy

Oh whoa. Yeah.

Luke

And then they might, first of all, the first step is getting your password.

Andy

Yeah.

Luke

But then they might also try and trick you into claiming that they are from the super fund or the bank and for you to hand over that code over the phone, perhaps.

Alex & Andy

Oh, right.

Luke

So that’s…

Andy

So they’ll even call you and you'll speak to them while they do this.

Luke

Yeah, so that's just one way that they might try and… if they are trying to impersonate your super fund or MyGov or ATO, and they might be… trying to impersonate those and, trying to get in that way.

Andy

Yeah.

Alex

And I feel like you often picture someone who's not tech savvy, really easily being taken advantage of. But I mean, I know personally, when I had a newborn, if the ATO had called me up asking for my tax file number, I could have easily given it away because I was just in a fragile headspace.

Luke

Absolutely. That's… that's so true. I think most people say, oh, I would never get caught with that, but… And that might be true 99% of the time, but it's that 1% where it could be just 5 p.m. on a Friday or just, at the right time. And then you might, for some reason, you might fall.

Andy

I used to feel real cocky about it, I used to be like, I've got this and then work does this thing where they send you these phishing tests where they just see if you click on them. And then within my first year, I clicked on three and I had to do some special training with a guy who was really sweet. It was really kind, but oh my gosh, every time I get an email that I'm like, is this him? Is he gonna scam me? Am I going to get another like internal scam or whatever, which is so good to do. But yeah, to my shame. Sorry, listeners. But yeah, Rest… Rest really care about it, and they want to make sure that we're doing the right thing internally to make sure that we're not putting anyone's information at risk as well.

Alex

And it's probably better to be overly cautious than under, like to assume that everyone could be a scammer, in this day and age, because it's so prevalent, why not just assume that every email could be phishing.

Andy

Are you telling me something right now?

Alex

I don’t know

Andy

It's like… I no longer trust you, Alex. (laughing)

Alex

I’ve been setup by security, this is an intervention, this is what this is.

Andy

Yeah okay, cool.

Alex

But, surely this is illegal?

Luke

Yeah, it absolutely is. And the scammers know that there are strict rules about withdrawing from APRA regulated super funds. So that's why their goal is to trick you into agreeing.

Alex

Okay. So it's about the on the phone, okay, send to my bank account. And when that happens, you've agreed to do it. Yeah.

Luke

Yeah, exactly. Yeah. So that's what they're hoping for. So it's just very important that if you do have someone contact you talking about your super then just be very careful.

Andy

Yeah. And so, just before you said that it's hard to get this money back. Does that mean, like, if I agree to it, they've gotten away with it essentially?

Luke

Yeah, it can be. Yeah. It can be very difficult to recover in those instances because you essentially have agreed to do that.

Andy

Yeah. Right. They've said you've signed this thing, or you said this thing and they’ve managed to snake it out of you. It's crazy.

Alex

So Luke what can people do to avoid being scammed then?

Luke

Yeah, that's it's a good question, Alex. So I think there's just a couple of things to be aware of. Definitely unsolicited contact. If someone calls you out of the blue. And a key one is if there's a great sense of urgency that's always a sign to slow down. Another good one is to use official channels only. So don't use any links or click on any URLs that someone might have sent you. Always just log into the app or directly to the website that you know and definitely don't share any passwords or your TFN through like, over the phone over email.

And finally then just be wary if anyone is… asks… is offering you early access to your super. That's one of the biggest red flags.

Alex

Yep. So, if it seems too good to be true it often is.

Luke

It probably is, exactly.

Alex

And if you think Rest is calling you directly unprompted, maybe that's a good sign to hang up and then call Rest directly on their number and see if that was a valid request.

Luke

Absolutely.

Andy

Not to call back the number on the phone, but to go to the website, get the right number, call that number.

Alex

Put it in the show notes.

Andy

Yeah yeah yeah.

Luke

Login to the app, check for any updates, or login directly onto the… the Rest website.

Andy

Yeah. Yeah. Cool.

Alex

Makes sense. Always verify, right Andy?

Andy

Yeah of course I do. Yeah yeah yeah.

I mean, jokes aside, scams are kind of getting more complex, right? And when we went out and talked to people on the street, we heard this story where essentially it was like someone who was being a scammer was getting scammed themselves. Like a scam inception.

Alex

Like a pyramid scam scheme.

Andy

It was a scam in a scam. Yeah.

Alex

Scam sandwich.

Andy

And like, I can't do it justice just trying to explain it. So let's check that out.

------ vox pops starts

Sinem

Do you get any scam phone calls or emails or…

Person 1

Constantly.

Sinem

Constantly?

Person 1

Yep.

Sinem

Do you think you're good at spotting them now?

Person 1

I just report them to the ATO.

Sinem

Yeah. Nice.

Person 1

I had a beauty come up where a guy told me that the ATO was going to give me $5,000 because I was a really good taxpayer.

Sinem

Makes sense.

Person 1

Sort of made sense. All I had to do was buy a gift card to the value of $200 and give it to the guy that turned up. So, I went down and spoke to the ATO, and we had a couple of young detectives turn up.

The young gentleman came up, and came in and explained what he was doing, and the ATO officer asked him if he could see I.D. So he produced his I.D. showed it, and he said, the ATO gentleman said that's a really good I.D. mate, except it’s the wrong colour. He said it should look like mine. And the young gentleman nearly collapsed. Long story short, they went over and checked his boot. He had over $10,000 worth of gift cards in.

Sinem

Oh no!

Person 1

Complete files, and he actually thought he was working for the ATO.

Sinem

So he was being scammed the entire time as well.

Person 1

He was being scammed as well.

------ end vox pops

Alex

Whoa. That is crazy. Luke, have you heard of these kinds of scams before? Scams on scams?

Luke

Yeah, well I've heard of impersonation scams. But I don't think I've heard of the scammer being scammed.

Andy

It's nuts. So what should we do if we think that we might have been scammed in relation to our super account?

Luke

Yeah, always the first thing to do is directly contact your super fund directly, as we discussed, through the official channels. There are some other good sites that you can use.

Andy

Yeah.

Luke

Scamwatch is a, it’s actually a very useful site. It shows scams that are ongoing right now. You can also report scams there.

cyber.gov.au– there's some good resources there and some helpful tips. And idcare.org is, they actually specialise in assisting people who have been affected by identity theft and data breaches.

Alex

I feel like some scams, though, are more obvious than others, and there might be times when you don't even realise you’ve… you know, you clicked on the dodgy link or something hasn't happened immediately afterwards.

Luke

Yeah, I'd probably just advise there, just directly contacting super funds directly and just making sure that everything is okay. They should be able to help you.

Alex

How can I check if I've been scammed if I don't even know I’ve been scammed?

Luke

Well, another useful tool that I often like to check is haveIbeenpwned.com, so that’s P-W-N-E-D dot com. Yeah. And that's actually a very useful site. So, you can enter an email and if that email has been involved in any known data breaches, it will pop upthere.

Andy

Can I check that now?

Luke

Yeah.

Andy

Is that okay? Let's try this on the pod.

Alex

I’m going to do it.

Andy

We'll do a live check. Okay. Here we go. I’m going to put in my personal email okay. This is concerning. Here we go. Hitting check.

Luke

How’s it looking?

Andy

Ah… it's got 25 data breaches. Is that good? That sounds pretty good, it's a high number. (laughing)

Luke

It's a good number, but I'm not sure if that's good, but…

Andy

(laughing) Okay.

Luke

25 breaches, it can be a lot, but, oftentimes what's actually even more important than that number of 25 breaches is actually what type of information is involved.

Andy

Okay. Cool. Okay I'm scrolling through and I can start to see things like email addresses, names, usernames. I mean I've had this email account since 2008-ish I think. So it's been around for a long time.

Alex

Okay.

Andy

There's a Myspace scam on there,

Alex

Tom. No!

Andy

Yeah, yeah, yeah.

I guess the next steps for me are to burn this email into the ground and, and uh... flee the country? Like, I don't know.

Luke

Well, maybe not that exactly, but it's… look, it's just good to be aware of that. So, definitely some points to take out of that are… yeah if … if there are passwords popping up there, just to make sure that those passwords are not being re-used. If they are maybe after this podcast you could change them very quickly.

Andy

Yeah, yep.

Luke

Also another good aspect of that site is, it's a good overview of your digital footprint.

Andy

Sure.

Luke

So just seeing what information about you is out there because, information like that, it can help scammers impersonate you or also just help scammers, send you a much more personable or believable scam email or phone call even.

Alex

Oh that’s terrifying. So they might be looking at my Instagram and then sending me things based on what I posted or…

Luke

Yeah, absolutely, like we all have… like you said… a Myspace. We all have a digital footprint but, so it's just good to be aware of what is out there. So, if someone contacts you and says, oh you live at this address and oh, and the last three digits of your credit card number is this.

Andy

Or they could call me up and be like, I just saw your Myspace and then threatened to release the information and demand a ransom for it, I guess, like, oh my God,

Alex

I had a look at mine and there was only three, not to be a teachers pet, but I do wonder if that comes into having a fairly new email address. And maybe if you're updating your passwords, you've had the same email address, it could be worth changing it maybe?

Luke

Yeah, absolutely. Yeah Andy, in your case, possibly changing email.

Andy

Yeah.

Luke

But also another good tip Alex, is you could use different emails. So you could have one email for more sensitive or serious activities. And then another email for… if you are trying to… you want to sign up for competitions or different things like this.

Alex

Oh that’s a great idea. So if I want to get all the, you know, the deals when you're doing online shopping or in-store. You have the shopping email address. So that gets all the spam.

Luke

Yeah, exactly, yeah. And you just know that you don't put any sensitive information related to that account.

Alex

Okay, so maybe I'm not smarter than a scammer. I don't know about you, Andy.

Andy

I’m definitely not. Obviously.

Alex

I’m going to go stalk your MySpace later.

Andy

Oh, no no no no no no no no no no no.

Alex

But all that being said, thank you for being here. Luke. I feel like we're all in a better position moving forward to make things safer for our personal information.

Luke

That's great, thanks for having me.

Andy

Thanks so much, man. Thanks for being here.

Thanks so much for tuning in. Don't forget to like and subscribe and check out the show notes for any extra information. We mentioned a bunch of really helpful resources today.

Andy

And that's…

Andy & Alex

Super simple.