Industry funds bleed as early super withdrawals top $12b

APRA has released its weekly update on the federal government’s early superannuation release policy, which reveals that another $1,590 million funds were withdrawn in the week ending 24 May, with total withdrawals topping $12.2 billion:

As illustrated above, just over 1.6 million applications have been paid averaging $7,252.

Breaking down withdrawals at the individual fund level, we can see that industry funds suffered the six biggest draw downs, with the below six funds alone accounting for just over half ($6.4 billion) of total early superannuation withdrawals:

Given superannuants are permitted to withdraw an additional $10,000 from their funds from 1 July, we are likely to see more heavy withdrawals from industry funds, whose member base is generally younger and more exposed to COVID-19 job losses.

Leith van Onselen

Comments

  1. SunSuper withdrawals seem very high? Is that a Qld thing & all in tourism or something? TBH I would have thought Rest & Hostplus would have greater withdrawals than SunSuper. But maybe it’s a reflection of where SunSuper came from? Is SunSuper an amalgamation of super funds that had a lot of tourism types?

    • Im pretty sure when I did tutoring at university of Queensland that was the default super

    • They acquired Kinetic, recruitment industry superfund a few years back. Recruitment just not happening at the moment. Relatively young victim base. They also acquired the RBA Officers super fund so maybe it’s that….

    • Hostplus has probably seen the worst pass because of low account balances. Many ate their accounts in the first bite.

  2. how is the paying less than 1% of the total an issue? those 12bn are just drop in the ocean compared to how much money these funds are supposed to have?
    12bn withdrawal in two months is less than what these funds get paid in in the same period.

    this looks to me like Potemkin structure where all the money has been gone for ages …

    • DominicMEMBER

      This horse has been flogged to death – and, yes, wtf do these morons have the proceeds invested in that they can’t pay out 1% of funds?

      Good thing that ScoMo declined to bail them out — in future they’ll be forced to hold a higher proportion of assets in fixed income and the like, which is what any responsible manager would do. Clearly, the quality of fund managers at these industry funds is none too flash.

  3. This money in people’s pockets threatens to unleash a massive massive effect.

    • Nah, you have to lie in the declaration. But you’ve got to do what you have to do to get ahead.

      If you don’t withdraw, prepare to be outbid at the auctions by 20,000-80,000 again.

    • Basically, yes. There were about 4 steps including a self declaration of eligibility.

    • You’re lying on a declaration. technically that can be a prison sentence right? but I doubt anyone is going to be chasing this. 12b from a 3T system? it’s a rounding error.

      • DominicMEMBER

        Funny you should mention it but this rounding error appears to be causing liquidity issues for Super funds. But I’m sure it has nothing whatsoever to do with mismanagement or anything.

    • Are you going to withdraw any? I’m seriously thinking I will despite no change in my circumstances. I don’t like lying but I wonder if that matters anymore.

      The 10k I take will be thrown in with my other investment funds.

      • Thinking of it. No change in circumstances either, but better to have in the sky rocket now. 30-40 years before I retire…system will be kaput by then anyway.

        • that’s my thinking. Only thing stopping me is getting a phone call in several months times saying that I lied on a declaration

          • Ukraine fnMEMBER

            Just remember all the lies that Joshy and SFM have told you along with the gaslighting from Twiggy , Hardly Normal etc to easy your mind with what ever you decide.

        • Jumping jack flash

          My super, as well as many, many others’ I have spoken to, is grossly inadequate for any length of retirement in excess of about 10 years, with a part pension. I have less than 3 years’ worth of average wages in super, and 20 years left of employment.

          My super is actually not too bad after speaking with my peers. They’re in a lot worse shape than me due to self-employment and/or working for lower wages for most of their careers.

          Since we can expect around 30 years of retirement, maybe a touch less, it is not too useful when considered alongside the massive debt inflation that raises living costs up to and beyond retirement. Eating cat food for at least 10 years is all but assured.

          For many, a lot of their super, or all of it, will be handed over to the bank to settle on their mortgages when they retire. That also depends on how house prices, and most importantly, buyers’ debt eligibility, fare over the long term, which is anyone’s guess at this stage.

        • Brett and Mega, if I can offer a little thought exercise:
          Eligibility criteria are well known. Consider how you can demonstrate you meet it. I suggest a temporary reduction in your earnings can be established by taking a period of leave without pay or by temporary reduction of hours to part time for caring responsibilities or some other contrivance. Up to you how you do it. Just be aware that the ATO *may* data match your employer reported wages. You have less than 4 weeks to decide if you are going to do this in the current tax year.

  4. What is your point LVO? What do you see as the implications? Are they material?

  5. So, did the Big4 and retail super get the impact they wanted from their recent LNP donations? Any reductions in funds in Industry funds (and credibility) would be seen as a plus.

    Next step is to say how workers don’t want a super levy. They want cash.

  6. Jumping jack flash

    Go you good thing!

    12 billion is a pittance when compared to the 100+ billion that we all pay to the banks each and every year for our mortgages.