4 years ago
SUPER EARLY ACCESS CRYSTALISES BIG LOSS
STEPHEN JONES MP
The Australian Prudential Regulatory Authority has released its Quarterly performance data for regulated superannuation funds. It confirms that super funds were hit with a loss of -3.3% over the three months to March this year. The worst quarter on record.
This is a double whammy for the 1.4 million workers who withdrew their money at the bottom of the market under the Government’s early access scheme.
For most super fund members the March quarter drop is a only paper loss.
Superannuation is a long term investment so over time, funds can be expected to recover before most members access their accounts.
Tragically this won’t be the case for the 1.4 million workers who instead of receiving timely Government support resorted to accessing their retirement nest egg. For these workers who withdrew their money at the bottom of the market the loss was crystallised the moment they withdrew funds from their account under the Government’s early access scheme.
The hardest hit were young people.
ATO Data provided to the Senate Committee overseeing the COVID response revealed:
This is a double whammy for the 1.4 million workers who withdrew their money at the bottom of the market under the Government’s early access scheme.
For most super fund members the March quarter drop is a only paper loss.
Superannuation is a long term investment so over time, funds can be expected to recover before most members access their accounts.
Tragically this won’t be the case for the 1.4 million workers who instead of receiving timely Government support resorted to accessing their retirement nest egg. For these workers who withdrew their money at the bottom of the market the loss was crystallised the moment they withdrew funds from their account under the Government’s early access scheme.
The hardest hit were young people.
ATO Data provided to the Senate Committee overseeing the COVID response revealed:
- More than 50% of applicants were 35 or under.
- More than 33% of applicants were 30 or under.
- Under the ATO’s self-assessment automated approval system, nobody has been rejected for not being eligible.
- More than 50% of applicants for the scheme withdrew the maximum possible, suggesting where the maximum amount was not taken it is likely that they were only limited by not having $10k in their super account.
The big losses were in big part linked to the fall in Australian and international sharemarkets. Most APRA regulated funds have around half their funds in Australian and international shares.
The figures also show that superannuation has been a major contribution to stimulus payments over the COVID crisis period. Over the last month early access super withdrawals have increased by 1600% to hit $13.2 billion while payments to retiring members in lump sums and pension payments exceeded $21 billion in the first quarter of 2020. Early access super withdrawals are equal to the JobKeeper ($8.1 billion) and Coronavirus Supplement ($5.3 billion) payments combined.
The figures also show that superannuation has been a major contribution to stimulus payments over the COVID crisis period. Over the last month early access super withdrawals have increased by 1600% to hit $13.2 billion while payments to retiring members in lump sums and pension payments exceeded $21 billion in the first quarter of 2020. Early access super withdrawals are equal to the JobKeeper ($8.1 billion) and Coronavirus Supplement ($5.3 billion) payments combined.