The Federal Government should reduce levies imposed on superannuation funds because of the manner in which they are dealing with the COVID-19 pandemic.
In fact, the superannuation funds want the levies they pay the Government reduced by an amount proportionate to the amount of funds which have been withdrawn from the industry under the early release arrangements.
That is the bottom line of an Association of Superannuation Funds of Australia (ASFA) submission to the Australian Securities and Investments Commission’s (ASIC’s) latest funding proposals.
In that submission it states: “ASFA considers that total levies on the superannuation industry should be reduced due the impacts of the COVID‐19 crisis.
“The expanded early release scheme in response to COVID‐19 has led to a substantial reduction in the assets of APRA‐regulated superannuation funds – ultimately, it is expected that total payments under the scheme – as presently designed – will be over $30 billion.
“The Federal Government’s expanded early release scheme in response to COVID-19 has led to a substantial reduction in the assets of APRA‐regulated superannuation funds,” it said.
“Since the inception of the expanded scheme, funds have made payments totalling $25 billion (to 12 July 2020). It is expected that total payments under the scheme – as presently designed – is likely to be much higher (over $30 billion).
“The impact on APRA‐regulated funds has not been homogenous. Funds with members who are in industries particularly affected by the crisis have been disproportionately impacted. Not surprisingly, funds which have a heavy concentration of members employed in hospitality, restaurants and clubs have the highest rates of early release so far, at between 15% and 20% of the accounts in such funds.
“As such, ASFA considers that total levies on the Superannuation trustees sub‐sector should be reduced – by a similar proportion as the reduction in total superannuation assets from the expanded early release scheme,” the ASFA submission said.