The Australian Prudential Regulation Authority (APRA) released its latest weekly numbers on the COVID-19 Early Release Scheme today, detailing information about the applications super funds had received from their members between 20 April and 17 May.
The data shows that a further $1.6 billion has been accessed by super fund members on top of last week’s numbers, bringing the total to $10.6 billion. 1.59 million applications have been received so far, of which 1.41 million have already been paid.
While more money continues to be withdrawn from super accounts across the country, new research has emerged around the fear of Australians’ retirement savings being eroded during what was a volatile market reaction to COVID-19.
A survey of more than 3,000 working Australians by Russell Investments showed that in the weeks leading up to the coronavirus pandemic, two thirds of those surveyed incorrectly believed their super fund would “automatically” protect their nest egg from a market downturn.
Critically, 37% said they believed their fund already managed their investments based on their own personal circumstances, even if they did not actively choose how their super was invested. And 67% of those surveyed either did not know how their super was invested or left it to their fund’s default approach, while 21% didn’t realise they could choose their investments in super.
Russell Investments Managing Director Jodie Hampshire said asset allocation was one of the strongest factors driving the effectiveness of retirement income.
Ms Hampshire said the super system needed to allow members to have more individual, goals-based investment strategy options.
“Having the right asset allocation at the right time is critical – members who don’t take on enough risk when they are able to could see their super balances stagnate, while overly aggressive asset allocation at the wrong time can jeopardise a lifetime of savings,” Ms Hampshire said.
Prior to super fund members finalising applications for early withdrawal of super, the Australian Taxation Office (ATO) has stressed that they should get familiar with their super and check their balance to consider whether they can afford to draw down on those savings.
→ Related story: Should you move your super away from the balanced option?
The latest stats on the early release of super
According to APRA, 89% of applications have been paid so far, 10% are still in the pipeline and only 1% have been declined.
Members are waiting an average of 3.3 business days from when their super fund receives their application from the ATO to when they receive their withdrawn super, and 94% of people have been paid in five days or less.
Analysis of the APRA data shows the highest volume of applications remains with the following four funds:
- Australian Super – 215,694 applications, more than $1.3 billion paid so far, at an average amount of $7,528
- Hostplus – 173,218 applications, more than $1 billion paid so far, at an average amount of $6,887
- Sunsuper – 167,421 applications, more than $1 billion paid so far, at an average amount of $7,132
- Retail Employees Superannuation Trust (REST) – 156,560 applications, more than $953 million paid so far, at an average amount of $7,189
Canstar finance expert Steve Mickenbecker noted Hostplus’ higher number of applications received would likely be because of its higher proportion of young and casual workers, combined with the spate of restaurant and tourism shutdowns.
Overall, the figures show super fund members have taken out an average amount of $7,510, which is below the allowable $10,000 withdrawal amount.
Last week we broke down a scenario of how someone taking out the average amount could make up the withdrawal down the track by salary sacrificing a certain amount of money each month until retirement: