As at 15 May, the fund had received 173,226 ATO-approved requests for early release of super (ERS), totalling $1.18 billion.
Hostplus had paid 158,080 members a total of $1.05 billion, managing to process 97 per cent of its payments within the APRA-mandated five-day limit.
Four weeks into the scheme commencing, as at 10 May, early release claims across the super industry totalled $10 billion.
Hostplus chief executive David Elia said members across the hospitality, sport and tourism industries were among those hit hardest by the pandemic.
“We’ve brought on additional staff who are working around the clock to manage members’ enquiries but there is clearly more work to do,” Mr Elia said.
“… Prior to the current COVID-19 crisis, Hostplus would typically receive around 100 financial hardship applications in an average week.
“The number of special early release applications we’ve received to date is around 360 times higher than our normal volume, and our call centre has experienced a 290 per cent increase in calls in addition to the more than 8,000 emails also being received per week.”
But the fund has remained confident in its cash reserves and liquidity position despite the influx of early release claims, stating it will remain comfortable in accommodating investment switches and routine benefit payments.
The total amount of cash available to Hostplus as at 18 May was reported to be $6 billion.
“The total sum of ERS payments requested by Hostplus members to date represents less than 2.6 per cent of the fund’s total funds under management,” Mr Elia said.
“The overall number of people requesting early release is also getting lower each week. With parts of the economy beginning to reopen, Hostplus expects this trend to continue.”
Mr Elia added that a number of payments have been delayed to ensure “accurate and secure processing” while fraud has run rampant.
The AFP indicated it was investigating a scam where up to 150 Australians had $10,000 wrongly released from their accounts.
Interesting, because the second round of $10k comes soon, and a lot of people will do this. Hostplus also wont be having the same inflows because most their members are hospitality, which is one of the most industries impacted most. Surely there has to be some re-balancing going on, and in particular their illiquid assets.
So they have paid out more than $1B despite 95% of members being in the default fund, which holds zero allocation to cash and fixed interest. Something doesn’t add up. And if these funds are thinking those who took $10K won’t come back in July for another bite at the cherry, they are dreaming
Industry duds – would prefer their returns than those from the retail funds.
Which retail funds? There are plenty of low cost retail funds that outperform “Industry” funds with a similar asset allocation.
“Industry” funds outperform when they are compared to old high fee retail funds from the 80s and 90s, or when they are mislabelled to hide their true asset allocation. It’s deliberately misleading and deceptive.
Hang on, I thought they were supposed to be insolvent by now. Don’t tell me some of the retail fund aligned advisers were spreading fake news.
I don’t understand why super funds would be dealing with so many enquiries relating to COVID-19 early release. Isn’t it being administered by the ATO via myGov? Couldn’t the super funds just put a message on their website and phone system directing people there? Or is it because super funds want to have a conversation with consumers first, so they can try to talk them out of withdrawal? After all, funds like HostPlus need that money themselves to pay for football sponsorships, corporate entertaining, and union operating costs.
Of course the number of people requesting early release is getting lower. You can only make one request before 30 June, and most people who plan to do so will have already done it. But there will be a huge spike in requests come 1 July when the window opens for the next round. The financial hardship caused by COVID-19 is not disappearing overnight due to a minor relaxation in restrictions.
These guys really have no idea what’s about to come if they think it will ease off… By October there will be a ghost town of dead retail and restaurant chains. Most businesses can’t financially support 20-50% seating capacities.
With higher unemployment, the amount of contributions in the near future is likely to taper off substantially – which I think is what you are getting at here?