Did 5% of super early release applicants empty their accounts?
Around 5% of early release applicants who were members of one of Australia’s largest industry superannuation funds entirely cleared out their accounts under the Government’s hardship early release superannuation scheme which ended on 31 December, last year.
Data provided to a Parliamentary Committee has revealed that 21,364 members of the big retail industry fund, REST, had actually entirely closed their superannuation accounts with the fund by 2 December, with the latest available data held by the Australian Prudential Regulation Authority (APRA) revealing that a total of 460,529 members of the fund had participated in the early release scheme.
According to the APRA data, those 460,529 members drew out a total of nearly $3.3 billion from the fund up until 20 December, representing a not insignificant slice of REST’s total funds under management of just under $55.5 billion.
Superannuation fund executives said that the 5% marker for members who had totally emptied their accounts was typical across many of the funds dealing with early release.
The latest APRA data confirmed that REST was among the top 10 funds impacted by the early release scheme which on their own accounted $24.2 billion of the total $36.8 billion withdrawn under the arrangements.
The APRA data revealed the most affected funds as being:
- AustralianSuper which saw 648,518 members withdraw nearly $5 billion;
- Cbus which saw 276,634 members withdraw $2.3 billion;
- HESTA which saw 227,020 members withdraw $1.8 billion;
- Hostplus which saw 426,015 members withdraw just over $3 billion;
- MLC Super which saw 170,565 members withdraw $1.3 billion;
- Sunsuper which saw 500,472 members withdraw $3.6 billion;
- AMP’s Super Directions which saw 129,829 members withdraw nearly $1.1 billion;
- BT Retirement Wrap which saw 210,390 members withdraw $1.6 million; and
- OnePath which saw 141,479 members withdraw nearly $1.1 billion.
Evidence provided to the House of Representatives Standing Committee on Economics also put paid to suggestions that the majority of those seeking early release were relatively young members with low balances.
Real estate industry fund, REI Super, told the committee that 62% of claimants had been female with 72% residing in either Victoria or NSW and 64% aged between 25 and 44.
Recommended for you
Financial Services Council chief executive, Blake Briggs, is urging Minister for Financial Services, Stephen Jones, to take advantage of the QAR opportunity to reduce regulatory duplication and ensure advice is affordable.
Former chair of the House of Representatives’ Standing Economics Committee, Tim Wilson, is planning a return to politics after losing his seat in the 2022 federal election.
Morningstar is going to offer research ratings of funds in the $3.5 trillion superannuation sector for the first time in response to demand from financial advisers.
Treasurer Jim Chalmers has opened a consultation into the design of the annual superannuation performance test, canvassing views on a range of reform options.
