Govt did not consult super funds on early release strategy

Key superannuation industry organisations, including industry funds, were not consulted about the Government’s COVID-19 decision to allow early hardship access to up to $10,000 a year in superannuation and are now urging caution and consultation to ensure the yet to be fully devised plan works properly.

Industry Super Australia (ISA) offered its cooperation but made clear it had not been consulted on the formulation of the Government’s proposal and urged effective coordination from the Government and the Australian Taxation Office (ATO) to make it work.

Fellow industry funds organisation, the Australian Institute of Superannuation Trustees (AIST) urged that access to superannuation should be a last resort.

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For his part, MLC Wealth chief executive and Financial Services Council chairman, Geoff Lloyd suggested that as little as 1% of the superannuation savings pool would be affected.

In doing so, Lloyd urged members to be patient given the logistics which would be involved in giving them access to their super.

Industry Super Australia was also insistent that the process would not be simple and said that assisting those in financial hardship would come down to how well the ATO worked with the funds, given each superannuation fund would have to manually issue the money.

“Effective co-ordination from the government and the ATO will be vital to ensure the scheme works efficiently and does not frustrate people further,” the ISA said. “Remembering that the workforce of many funds are working remotely just like other affected businesses.” 

“Aside from getting the details right, we need a commitment from the government to transparently report the scheme’s applications and any issues encountered. The scheme should also be reviewed as it is rolled out to ensure it will not hamper funds’ capacity to support the macro economic recovery.”

AIST chief executive, Eva Scheerlinck said the measures significantly broadened the eligibility requirements for the early release of super and could only be effectively administered by the ATO, particularly in light of its enhanced online capability. 

“AIST is urging Australians who are facing financial hardship to access all other sources of income measures before tapping into their super,” she said. “AIST is working with its member funds to explore other opportunities with superannuation to assist the community in these difficult times.”

 




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The union funds are squealing like pigs over early release. Their PR machine has already gone into overdrive, with union aligned "journalists" cranking out articles opposing it.

How dare the government allow hardship stricken consumers to withdraw the unions' money!

Sounds like ISA & AIST & IFM are worried their ponzi scheme will come undone if too many start taking money out

Let's get some facts here please. As a part of the business as usual operations of a super fund, they are required to have Business Contingency Plans in place. It might surprise many to learn that this includes 'pandemics' and the super fund is required to have in place people, operating systems and resources in place to deal with issues exactly like covid-19. There was always a plan to allow people to access their super early during a time of crisis. If this came as a surprise to any super fund I'd be highly surprised. It might come as a surprise to media or the general public who were never involved in the detailed planning. We should be confident that super funds can deal with this. They've got plans to make it happen.

Yeah nah.
Not ISA, they're just a little pyramid scheme with over exposure to 'unlisted assets' at over inflated lagging values to pretend 'their performance is so much better than retail'. We've seen it before with GFC, but this time with the relaxing of access to super, they're caught with their pants down around their ankles - about time someone bent them over and gave it to them. Perhaps when all this clears and there's a RoyComm into why ISA funds froze and couldn't allow their members access to funds, the utter BS around their asset allocations and the sickeningly sycophantic relationship with ASIC will come to an end.

Josh Frydenberg stated over the weekend that Superannuation was " the people's money ".
The ISA see it as their funding strategy for their Union comrades.
Are Industry Funds still going to be charging people who qualify for the early release scheme an Intra-Fund Advice fee?
That would be a good look for the ISA.
What does Kenneth Hayne have to say on this matter ??
Kenneth???.....Kenneth???....we can't hear you.

Union funds charge every single member an intra fund advice fee. Including 99% of members who never use the service. That's the whole problem. It's a fee for no service scam beyond AMP's wildest dreams. Yet Hayne and ASIC say it's perfectly OK if the union funds do it.

I wasn't aware that the ISA was running the Government. The reality is that the amount of money that will be paid under the coronavirus early release scheme is a drop in the bucket to what they will be pulling in through new cash contributions. If they cannot manage paying some funds out of the zillions they are collecting this year, they should be shut down. If the Union Funds had half a brain, they will realise that the $20,000 early release scheme now will be its biggest selling point in the future, as all of a sudden, people realise that super can be really helpful in serious time of need, like right now. There is another option - the Govt can just nationalise super instead. They might want to think long & hard about how they would impact their Union subsidisation cash cow racket then. Time for Union Funds to make a sacrifice like everyone else.

Wouldn't want to be selling property/infrastructure in this market. I wonder how this plays out if there is a run of cash withdrawals.

Last resort? Should be first resort. Try to stop them from losing as much of your money as you can.

The good old "pull all your money out of a professionally managed super fund straight after a market downturn, to put it into a 100% cash SMSF" strategy.

The same strategy that saved no-one any money after the GFC, but cost lots of people lots of money in subsequent years as the markets rebounded and cash went nowhere. Many of those idiots were finally starting to reallocate their cash to equities in 2018-2019 because the markets had become "safer". Doh!!

$20,000 out of a $200,000 fund is NOT "cashing up"

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