Momentum wins gold at Loeries

Momentums’ Smart Exit solution, developed together with Accenture, won the gold award in the Service Design category at this year’s prestigious Loeries. The Service Design category was introduced in 2015 to recognise brands that engage their customers in an innovative way.

Towards a better retirement for employees

Smart Exit is the first online process of its kind. It guides Momentum’s retirement fund members to make better financial decisions. Essentially Smart Exit saves members time and enhances their financial wellness by reducing the temptation of taking their retirement savings as a lump sum and spending it, instead of preserving it for when they retire, when they change employers.

For the staff member leaving, there is often confusion about what to do with their retirement savings benefit. In as many as 60% of cases, members take their retirement benefit as a lump sum and spend it. By doing this, they compromise their standard of living at retirement and their financial wellness. Riaan Singh, Senior Manager: Digital Strategy at Momentum Corporate and Public Sector says that Smart Exit is a clear, step-by-step process. “Smart Exit includes interactive scenario analysis showing members alternatives to help them realise the impact on their retirement and financial wellness if they choose to take their retirement savings as a lump sum and spend it. During the pilot programme, the number of members who opted to take their retirement savings as a lump sum halved. This means that people chose to keep their retirement savings invested rather than cashing out.”

Less admin and lower risk for HR

When employees leave their jobs, normally this is typically a time-consuming and paper-heavy process for HR personnel. This trailblazer also reduces the admin burden associated with withdrawing or transferring an employee’s retirement benefits. What’s more, it is often HR staff who finds themselves in a situation of giving financial advice to employees who leave the company about what they should do with their retirement savings benefit. This of course holds many dangers for the existing member as well as for HR staff who are not allowed to give financial advice.

Clear step-by-step process

Smart Exit allows members to easily transfer their retirement savings benefit from their current Momentum retirement fund to their new employer’s retirement fund and guides them to make good financial decisions. Members can even convert their group insurance benefits to individual insurance benefits with Momentum, without losing the amount of cover they enjoyed under their group insurance policy.
With a totally secure one-time PIN that gives members access to the Smart Exit site, they can see the following information:

• Their retirement savings to date;
• How their choices will impact their long-term savings; and
• The potential amount of tax they will pay if they take their retirement benefit as a lump sum.

The service also puts the member leaving in touch with the financial adviser of their scheme with the click of a button, who can answer their questions.

It is this ease of process and financial guidance that will likely better equip people to make more informed decisions, and secure a better retirement outcome.