The second tranche of the government’s measures to tide workers through the coronavirus outbreak allows individuals experiencing financial hardship to withdraw up to $10,000 from their super fund.
But Senator Hume has put super funds who might be dragging their feet on the changes on notice, saying “no part of society or the economy is a sacred cow”.
“When we emerge out [on] the other side of this crisis, the Australian people will remember who stepped up, and who checked out,” Ms Hume said.
“There is no doubt we will recover, but I think we all know that this country will never be the same again, and every industry in Australia will change after this. Superannuation will not be immune to this change.”
Ms Hume accused some super funds of “self-interest dressed in sanctimony” and said that some were claiming immunity from the changes on the basis of “a higher calling”.
“Often those who seek to thwart collective efforts are doing so to hide individual failings,” Ms Hume said.
“If a fund has run a fairweather-only investment strategy, they will be exposed. There is a reason that diversification is important – it reduces risk. Risk isn’t a just financial concept, it’s a reality, and we’re living it.”
The changes have been met with resistance from the superannuation sector, with Australian Institute of Superannuation Trustees CEO Eva Scheerlinck saying accessing super now would only “crystallise losses”.
“The truth is that while advocating for accessing super at times of crisis might provide an opportunity for opponents of super to break down universal compulsory super, policymakers must do better than a short-term hit at the cost of long-term economic and public policy benefit,” Ms Scheerlinck said.
Who stepped up – Advisers on the phone and email to clients outlining what is going on (and being the most trusted – MLC report) all for no additional fee other than their existing fee / commission payment even though ASIC don’t think anything other than an advice document within a perfect time frame is worth paying for.
Who checked out – Product providers hiding their shortcomings and trying to retain FUM for more fees and not having capacity to service their clients. (tried calling Aus super lately?) Sounds like an unsustainable business, wheres the FFNS? Clients want advice now and funds can’t do it. Also insurers who will force lapses so that they can claw back commissions for their own benefit and also cancel pre March IP policies that are more favourable to clients.
And us advisers will be the scapegoat…. again.
interesting… I was always telling clients it was very hard comparing against an industry fund as a typical Balanced Fund looks like a Growth Fund.. compare the compare, that is, apples for apples, you know, Asset Allocation v Asset Allocation. I just wonder what the unlisted assets are now worth?… perhaps a crap retail fund does have some benefits???
Shows a complete lack of knowledge around superannuation here. Superannuation is to fund retirement and a lot of her beloved industry funds do not have the liquidity to pay this out.
She is talking about the abject corruption, virtue signalling, know it all, unaccountable Industry Super Funds with their funds stuck in over valued Union dominated construction projects. All will be laid bare. Turns out every cloud does have a silver lining. If only the corrupt regulators (always in kahoots with the ISFs) would apply some of their over-zelous good advice and prudential standards to them. Don’t hold your breath.
Although individuals cannot claim until mid April, I see what she is saying. Albeit a different issue, make no mistake – there will be higher taxes on super at the back end of this.
To think that Eva Scheerlinck, with her Law degree and University of Toronto Management course, would even have a basic understanding of the challenges faced by ordinary people who are struggling is laughable. Go read the ‘doing it tough’ stories on many social platforms before you speak again. The arrogance! If there is no short term, there is certainly no long term “public policy benefit”. People should draw on their super if they need to. I’m pretty sure you haven’t missed many meals recently Eva and you wont have to draw on your super any time soon.
Exactly. Not one of the commentators that are encouraging people not to take out their super will find themselves living from day to day wondering what will happen tomorrow.
Eva Scheerlink is a union fund lobbyist. Her job is to get as much money into union funds as possible, and keep it there. Because unions are so on the nose with most people, they try to camouflage themselves using names like “Industry Super” and “Australian Institute of Superannuation Trustees”.
Woops! Looks like the unions may have blown their cover. The ACTU came out today lobbying against early withdrawals. That may well prompt consumers to ask “what’s it got to do with the ACTU?”. The answer dear consumers, is that unions ultimately control the so called “Industry” funds and they don’t want you to take “their” money away from them. Somebody forgot to remind the ACTU spokesperson that they’re supposed to leave union super lobbying to innocuously named fronts like IFS and AIST, in order to hide union control of “Industry” funds from consumers.
This is the Senator who reportedly switched her super to HostPlus only months ago. The fund with a balanced investment option containing ZERO cash, ZERO fixed interest and 7% credit. Now she is worried about funds running a ‘fair-weather strategy’, with little diversification? I’m confused
On what grounds do you base your assertion that she switched her Super to Hostplus?
This change of funds by the Senator was reported in the AFR on Feb 11, 2020. The “register of interests” relating to the Senator had to be updated.
Yep she was apparently upset with Australian Super putting a tiny fee increase due to the ever so badly handled Protect my Super – but Destroy many peoples Life Insurance debacle.
Just to goes to show how smart people can be so stupid with money when they do not get PERSONAL ADVICE
I agree diversification is important. Our regulators have not learnt anything from the past often advocating more nonsense instead of stress testing the very systems they have contributed to the creation of. Ms Hume and her ilke need to look in the mirror. Our economy is not diversified with more that 35% of industry in China and land companies and resources devoured by this one country. Our advice industry is not diverisified as the government pursued a 4 pillars policy to the detriment of consumers along with thought bubbles like the productivity commission report to consolidate further choice for superannuation investors. A complete joke for this minister to come out with such words with nothing more than hypocrisy and incompetance as her guide.
somehow it will be the advisers fault again….
Super withdrawals are processed through MyGov which hasn’t yet got functionality. No super fund could possibly be accused of dragging their feet. They are restricted by the law in how funds are released from super – those laws have not changed in light of the crisis.
So where’s the motive behind her statement? Distraction, misdirection or something more sinister? Like building a case to justify much higher tax rates on super funds given the massive budget hole & honey pot of superannuation that the government is eyeing off?