INDUSTRY Super Australia (ISA) has acknowledged the announcement made by the Federal Government today and is ready to work through the all important detail that will enable people suffering hardship access to some of their super in an efficient way that doesn’t undermine our national savings system.
"As we have been indicating publicly, this is an issue that must be handled very carefully in order to prevent the compounding of liquidity pressures that may be faced by superannuation funds in the current market conditions, and as they support anxious members," Industry Super Australia chief executive officer Bernie Dean.
"Although industry superannuation funds were not consulted in the formulation of this proposal, we stand ready to engage with government and the ATO to make it work.
"Assisting those in financial hardship will come down to how well the ATO works with the funds, given each superannuation fund will have to manually issue the money," he said.
"Effective co-ordination from the government and the ATO will be vital to ensure the scheme works efficiently and does not frustrate people further, remembering that the workforce of many funds are working remotely just like other affected businesses.
"Aside from getting the details right, we need a commitment from the government to transparently report the scheme’s applications and any issues encountered. The scheme should also be reviewed as it is rolled out to ensure it will not hamper funds’ capacity to support the macro economic recovery."
“IN TIMES of financial crisis such as now, retirees need more flexibility in the minimum amount there are required to draw from their superannuation, Association of Independent Retirees president, Wayne Strandquist said this week.
“Retirees living off their superannuation usually have some investments in shares and they have experienced a dramatic fall in their account balances due to the current share market collapse," he said.
Legislation requires retirees to draw a minimum percentage from their superannuation pension account, usually drawn monthly. Being forced to withdraw from superannuation when the value of the account is substantially diminished will have long term impacts on how long superannuation lasts in retirement.
Currently, retirees do not have the option to preserve their account balance by stopping the minimum superannuation drawdown amount.
“The Association of Independent Retirees seeks government intervention to give immediate relief to the current age-based drawdown percentages for account-based pension income streams and allow greater flexibility for retirees to vary the amount they can draw from their superannuation account," Mr Strandquist said.
“The Association has previously called on the government for greater flexibility by broadening of the age ranges and a lowering of the minimum drawdown percentages, but with the current investment market crisis, the Association seeks immediate options for retirees to lower or cease withdrawals from their superannuation account and resume their usual drawdowns when the investment markets improve."
THE Australian Small Business and Family Enterprise Ombudsman Kate Carnell has praised the banks, which have on March 20 announced a significant relief package for COVID-19 impacted small businesses.
The Australian Banking Association said banks would defer loan repayments for small businesses affected by COVID-19 for six months
“This is a welcome initiative that will help many struggling small businesses keep their doors open during these extraordinarily challenging times,” Ms Carnell said.
“I would encourage all small business owners who are experiencing financial difficulties, to call their banks now, to make the necessary arrangements.
“Banks are promising to fast-track the approval process to ensure small businesses get the support they need as soon as possible.
The assistance package will apply to more than $100 billion of existing small business loans and put up to $8 billion back into the hands of small businesses.
“As we navigate this unprecedented crisis, it’s encouraging to see our banks are taking this proactive approach and leading by example,” Ms Carnell said.
“Our small business sector is the engine room of the economy and it urgently needs support.
“In the meantime, my office will continue to advocate for additional measures to help small and family businesses stay afloat in this difficult period.”
SELF MANAGED superannuation funds (SMSFs) could avoid the full brunt of COVID-19’s impact on financial markets, thanks to higher than average exposures to cash and other low-volatility assets.
One quarter of the SMSF sector is held in cash and about 45 percent is held in shares, compared to other super funds that hold 10 percent in cash and 60 percent in shares on average.
Self managed superannuation funds (SMSFs) could avoid the full brunt of COVID-19’s impact on financial markets, thanks to higher than average exposures to cash and other low-volatility assets.
One quarter of the SMSF sector is held in cash and about 45 percent is held in shares, compared to other super funds that hold 10 percent in cash and 60 percent in shares on average.
“This heavy exposure to low risk assets like cash may prove to be fruitful in the current COVID-19 climate as they may be better protected than the average not-for-profit and retail fund,” said executive director of research at Rainmaker Information, Alex Dunnin.
“Some super funds’ diversified default investment options have fallen 10-15 percent as a result of the current market conditions.”
Despite their potential strength in the current climate, contributions into SMSFs and small APRA funds fell by 60 percent over the last two years, according to research from Rainmaker Information, published in their Advantage Report.
SMSFs reached a peak of 33 percent of all superannuation funds under management (FUM) in 2012, though this has since dropped to 26 percent, which is around $750 billion.
“A higher than average exposure to cash previously dampened the returns of the average SMSF when compared to a retail or not-for-profit fund, so perhaps it also damaged their appeal.”
Interest in SMSFs has slowed in recent times, with the number of SMSFs being started each year falling almost 75 percent from their peak.
Ten years ago there were a net 40,000 SMSFs started each year, though only 12,000 were started in 2019.
Simultaneously overall annual superannuation contributions have fallen from $157 billion to $130 billion, and SMSFs made up 90 percent of the reductions.
This number is even more significant given that SMSFs only make up 9 percent of all superannuation members in Australia.
A key cause of the reduction in contributions into SMSFs appears to have been the introduction of the Transfer Balance Cap (TBC) in 2017.
The TBC removed unlimited tax concessions for retirees with large account balances.
Following its introduction retirees with large balances, many of whom were likely members of small funds, appear to have responded by significantly reducing their contributions.
“The drop in contributions has been so extreme that SMSFs are only marginally ahead of the retail fund segment, which fell out of favour with Australians after the global financial crisis,” Mr Dunnin said.
Other determining factors contributing to a decline in contributions are increased regulatory scrutiny, reductions in their taxation advantages and persistent attention on the segment’s low benchmark investment returns.
About Rainmaker Information Rainmaker Information is a privately held Australian company founded in 1992. The company has established a reputation as a leading financial services information publishing house in Australia providing marketing intelligence, research and consulting services on the wealth management industry and forms part of the Rainmaker Group of companies. www.rainmaker.com.au
Palace Cinemas has reviewed advice from The Australian Government, delivered on Wednesday, March 18, regarding non-essential services and public gathering mandates, as well as examined safety concerns for our patrons and staff.
A spokesperson said, "From this review, we’ve made the difficult decision to temporarily close all Palace Cinema locations from Thursday March 19 for an indefinite period to protect both our staff and patrons.
"We intend to re-open as soon as circumstances allow, with the usual rich selection of quality cinema and our much-loved international festivals. Watch for further announcements.
"Patrons who have booked online for future sessions will be contacted shortly and offered a returnable form to receive a full-refund. Any patrons seeking refunds for in-person bookings can email their relevant Palace Cinema location with images of their tickets, and a refund form will be provided to be completed and returned, which will be processed as soon as possible.
"Refund forms are being utilised to ensure correct information is being processed, and to keep things running as smoothly as possible both for our customers and for cinema staff during this time," the spokesperson said.
"We sincerely thank you all for your patronage and support during this unprecedented time and our excellent staff for their efforts and dedication under challenging circumstances.
"Rest assured we will be back offering sublime entertainment and a place to indulge and escape when it is safe to do so.
If you wish to continue supporting Palace Cinemas during this time, consider purchasing a premium Palace Movie Club membership or online gift card. But most importantly, stay safe and look after each other, we can’t wait to welcome you back."