A survey commissioned by Industry Super Australia, which polled 1,100 people in the first two weeks of April, found that while 30 per cent of respondents said they were likely or very likely to take up the government’s early release scheme, 40 per cent of those respondents said they had not yet been financially impacted by COVID-19.
Industry Super said this meant a significant proportion of those who had registered interest in the scheme so far may not actually be able to access it, as eligibility was dependent on the fund member having lost their job or suffering a significant reduction in work hours or business turnover.
Industry Super chief executive Bernie Dean said if too many people who weren’t eligible applied for the scheme, it could prevent those genuinely in need from accessing their money quickly.
“It is important that those that need to access their super can do so quickly, without being caught behind an administrative logjam of ineligible claimants,” Mr Dean said.
“The Australian Tax Office has assured us there is a robust compliance regime in place and those who deliberately flout the rules could face severe penalties.”
But the poll came under fire, with Assistant Minister for Superannuation, Financial Services and Fintech Jane Hume tweeting she was “disappointed to see Industry Super using members’ money to conduct push-polling in a tawdry attempt to undermine confidence” in the measure.
“At a time when the rest of the industry is working together with struggling Australians, it is sad to see the ISA engaging in disingenuous media stunts that reek of self-interest over national interest,” Ms Hume said.
“Many of the funds ISA is paid to represent have been public in their support for these measures and consistent in that support.
“It’s Australian members’ own money and only they can make the decisions that are right for them and their families. Enough, Industry Super. We’re all in this together.”
Those respondents who were interested in taking out money from super said they would take out around $13,500 each on average, according to the survey.
Of those who said they were very likely to apply for the scheme, 46 per cent said they were still in paid work and their hours had not been reduced, while 40 per cent were in households that earned more than $104,000 a year.
However, 29 per cent of those who said they were very likely to apply for the scheme said they thought their job might be impacted at some point.
In a media interview on Tuesday, Ms Hume said more than 975,000 fund members had registered interest in the early access scheme ahead of its opening for applications on Monday.
Off the back of its data, Industry Super called for “random checks on claims to deter inappropriate applications and real-time monitoring of claim volumes”.
“The ATO should also continue issuing clear warnings that anyone flouting eligibility rules could be penalised,” the group said.
Where have all the industry fund faithful gone? Normally there would be three of four posts by now telling us porkies about higher returns and lower fees. Maybe they have woken up and are rushing to complete paperwork to get the hell out. Probably a good idea before the rout on unlisted assets comes. An article in the AFR today suggests retail properties will see rents and values slashed by 30%, and we all know commercial properties will be left vacant as businesses discover working from home is a model suited to large sections of their staff. Optus has already announced they are doing it. Many more to follow. Ouch. And these were considered ‘defensive’ assets? Oh my god.
I am an industry fund faithful, but certainly not rushing to the exits. That being said, i dont have clients investing in their options with unlisted assets, instead preferring the lower cost true index funds – I hate that they class commercial property as 50% growth 50% conservative and APRA should hang their head in shame for allowing this to continue.
Agree commercial properties will come under pressure due to working from home being more accepted. However, to think it is only industry funds that will be impacted is bizarre.
There are plenty of ways to invest super into cheap index funds outside of industry funds. If you hate the unethical and misleading classification of unlisted assets, why reward their behaviour? Besides, you had better get ready for fee hikes after these funds lose their small balance cash cows who have been fleeced of premiums (for insurance they never agreed to) and proportionately high fees due to flat dollar fees.
Agreed. Union funds also tend to have far worse customer service, and actively block the involvement of advisers trying to help members manage contributions, asset allocation, tax deductions etc. associated with their super.
‘true index funds’???? Is that the synthetic type of index funds, where clients money is not actually invested in the shares and instead is invested into cash and derivatives with substantial counter party risks and significantly worse tax treatment? For what? A small fee saving? I really hope I am barking up the wrong tree. Surely industry funds wouldn’t be dumb enough to allow their members life savings to be invested in these instruments.
It is push polling and its a disgrace. Industry Funds will be tarnished when all of this is said and done.
There will be a mass withdrawal of funds, no doubt. Give people uncertainty and the access to cash and they will grab it.
I believe also that China only had 84,000 cases of Corona and 4000 deaths.