In these enlightened ‘Work Choices’ days there are all sorts of new ways of remunerating staff.
The following information was taken from today’s ninemsn:
The St George Bank is offering employees participation in a new ‘scheme’ - Workers in the scheme would be paid 80 percent of their salary for four years, and then the same during their fifth year away.
The bank says: "As things are getting tight in the labour market, people are saying 'I can get a job somewhere else', and managers are going to have to learn to be more flexible and adaptable."
How flexible and adaptable?
Let’s say an employee receives $40,000 per annum.
Under this scheme they would now receive $32,000 (80%)
The Bank would, I assume, invest the 20% they kept. Lets assume they earn 8% interest annually on the $8k they’ve held back. They invest this money in a compounding account so:
The Bank puts away $32,000 + the compound interest (and I’ve only used conservative ‘ballpark’ figures, it’s voodoo math because the interest compounds daily and I’ve only provided a grossed up annual) so at the start of year 5 they have $36,049 to pay wages of $36,000.
The employee has forfeited $8,000 a year for 4 years to gain absolutely zero! In fact, they've given the Bank $50 for the privilege!
This isn’t a compensation scheme - its theft!
Beware of Banks bringing ‘gifts’
NB: Proving that Mr Rotten was right when he wrote: “Blind acceptance is a sign, of stupid fools who stand in line”, I note that 92% of people who have read this article and voted, think the offer’s just too good to pass up!
Do me a favour!
What a great scheme!
$307/fortnight ($8000pa) invested at 7.5% compound interested for 4 years would be $37,180.02 at the START of year 5. Unless the bank paid the amount as a lump sum they would continue to earn interest on the slowing reducing amount over the 5th year adding another $1373.96 to the banks profits!
There you go!
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