In a statement released on Thursday, the Actuaries Institute said the ATO should be charged with distributing payments to fund members and invoicing super funds for the payments, which could help in spreading them out over time and reducing liquidity issues for funds.
Tim Jenkins, convenor of the institute’s superannuation practice committee, said there was a need for the government to look at smoothing out payments to improve funds’ ability to pay out.
“A possible solution is for the ATO, in addition to making the determination, to distribute the payments to further streamline the process to get money into the hands of those in need quickly,” Mr Jenkins said.
“The ATO could then invoice the superannuation funds over the following few months to spread the cash flow impact on funds.”
Actuaries Institute chief executive Elayne Grace said while the government was obligated to assist workers who had lost their jobs as a result of the crisis, this had to be balanced against the integrity of the retirement system in the long term.
“We know large parts of the community have insurance through their super fund. We want people to have access to their funds, to help them through very difficult times, but it is important to know and map the consequences,” Ms Grace said.
“The Actuaries Institute would encourage the government to commit to restoring and maintaining the integrity of the retirement income system after the crisis ends.”
I’m not so sure the ATO are up to it, a client has had their super account closed and directed to the ATO as “lost” super. not only is it not lost, it isn’t below $6,000.00 in account balance, the client being over 65 and still working completes paperwork to that effect every year and there isn’t any death cover to eat away at the balance . PS the funds are cap guaranteed (thank goodness otherwise the client would be heavily out of pocket)
The real question should be asked of the investment and corporate governance of members money given they are required by APRA to run liquidity crisis events just like what is being talked about here.
As such funds “should’ or one would reasonably expect that their well paid professional investment mangers of members portfolio’s have been designed in a way to cope with….. and still have capacity to fund withdrawals by members, especially in times of “crisis”. And as an experienced professional having both experience and the knowledge that previous corrections have always lead to clients wanting to move to cash or access funds for personal reasons.
However regarding individuals who are wanting to withdraw funds from their super on the grounds of financial hardship I believe this is an issue more for those who have chosen go go it alone and not have a financial planner.
Why? Because…..
Researchers found 92% of people who work with financial planners are happier and more confident in life because their financial house is in order.
Sixty-six percent of the survey respondents who have a financial adviser said they feel financially secure, compared to 30% of those who don’t pay for professional help.
A whopping 85% of respondents who work with a financial adviser feel their personal life is headed in the right direction, compared to 71% of those who don’t have an adviser.
And seven in 10 respondents who have an adviser said they’re happy with their life, compared to five in 10 people who said the same but handle their money on their own.
Wow big problems coming for the industry funds
Good call