Predicted 2nd tranche early release surge become a reality
The second tranche early release superannuation surge predictions of the Australian Prudential Regulation Authority (APRA) appear to have become a reality, with superannuation executives reporting a significant spike in members seeking early release.
APRA predicted the surge when releasing data covering the last week of June and pointed to the likelihood of a surge once the second tranche was triggered on 1 July.
“We’ve seen a significant upturn in early release requests with almost four times as many members filing as occurred in the last week of June,” a superannuation fund chief executive told Money Management.
“Interestingly, a significant number of those members had already applied for early release in the first tranche,” he said.
An executive for another fund confirmed the second tranche spike and said that it would be interesting to see the full data set for the first week of July when it was published by APRA next week.
Other superannuation industry executives said that the COVID-19 situation in Victoria could not be dismissed, albeit that the State Government had last week only named hotspots rather than moving to a full lockdown.
However, they said that, once again, it was the retail and hospitality sectors which would be most exposed in Victoria.
APRA earlier this week revealed that, over the week to 28 June, superannuation funds made payments to 129,000 members, bringing the total number of payments to approximately 2.4 million since inception.
“The total value of payments during the week was $1.2 billion, with $18.1 billion paid since inception. The average payment made over the period since inception is $7,503.”
The APRA data also confirmed that just 10 funds were responsible for nearly 67% of the early draw-down payments, paying $11.87 billion of the total $18.1 billion paid since the scheme started.
Those 10 big funds are AustralianSuper, REST, Hostplus, Cbus, Sunsuper, BT, HESTA, MLC, CFS and AMP.
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.
