Australian retirement solutions provider Industry Super has told the country’s senate standing committee on economics that as many as 50,000 Australians have taken advantage of the government’s coronavirus early release scheme and have drained their superannuation accounts.
According to the group’s deputy chief executive, Matthew Linden, the number could keep rising as the scheme is active and people can still make claims.
Support the recovery
He said this is going to have a double effect, the first will be on workers who lose the opportunity to compound their savings, and the other will be on superannuation funds that will see a reduction in the number of clients, reported local news website IFA.
“In terms of costs, in the scheme of things I’d expect the prospect of fee impacts to be low – there’s other factors at play and I think trustees will do everything in their power to keep a lid on fees,” Linden said.
Industry Super chief executive Bernie Dean said that, given the current numbers, there could be an opportunity for an increase in the super guarantee, considering that younger savers would require higher compulsory contribution to make up for the losses on their retirement savings.
Dean, however, was not concerned about a potential increase in superannuation fund fees, because he believes this is the time to work on helping people, especially the younger generation, recover their balance.
