Industry Super Australia (ISA) has indicated that while it will work to ensure members under severe financial stress due to the economic impacts of the coronavirus will have access to their super in line with the government’s recently announced early access scheme, it must be approached “with extreme caution”.

Acknowledging that the COVID-19 pandemic has created extraordinary times, ISA said it acknowledges the government’s need to take the extraordinary measure of loosening the restrictions on early access to superannuation as part of its financial support package.

“But accessing superannuation early should be approached with extreme caution and only as a last resort,” it flagged.

It follows the comments of Australian Institute of Superannuation Trustees CEO Eva Scheerlinck yesterday, who also called for caution to be applied by financially stressed Australians considering accessing their super. 

ISA highlighted the significant program of wage stimulus measures, including an increase to welfare support payments, that it has asked members to consider exhausting before tapping into their super.

The super body said its own analysis showed that “a 20-year-old who accesses the full $20,000 available under the scheme could lose more than $120,000 from their retirement balance”.

Similarly, a 30-year-old who accesses $20,000 from super now could lose about $100,000 when they hit retirement and a 40-year-old could lose more than $63,000.

ISA chief executive Bernie Dean acknowledged that a number of super fund members have lost their jobs or had their hours dramatically reduced.

“Industry super funds will do all they can to help them.”

“But members should tread carefully and only think about cracking open their super after they’ve taken up the extra cash support on offer from the government – super should be the last resort given the impact it can have on your retirement nest egg,” he explained.

“Members need to know that taking your super now is like selling a house at the bottom of the market – you’ll lose money you would probably have clawed back overtime.”

Despite its misgivings, ISA said it will work with the government on the “all-important detail” of how the scheme can be rolled out to prevent unintended impacts on a member’s savings and their super fund.