Retirement
Hostplus expects early release to ease as economy reopens
Hostplus has reported that the volume of early release applications it has received is 360 times higher than members’ usual financial hardship claims, as the fallout from COVID-19 sees mostly hospitality industry members withdraw their superannuation.
Hostplus expects early release to ease as economy reopens
Hostplus has reported that the volume of early release applications it has received is 360 times higher than members’ usual financial hardship claims, as the fallout from COVID-19 sees mostly hospitality industry members withdraw their superannuation.
However, the hospitality industry fund anticipates that this will be short-lived as government restrictions easing will allow workers to get back to work.
As at 15 May, the fund had received 173,226 ATO-approved requests for early release of super (ERS), totalling $1.18 billion.
Hostplus had paid 158,080 members a total of $1.05 billion, managing to process 97 per cent of its payments within the APRA-mandated five-day limit.
Four weeks into the scheme commencing, as at 10 May, early release claims across the super industry totalled $10 billion.
Hostplus chief executive David Elia said members across the hospitality, sport and tourism industries were among those hit hardest by the pandemic.
“We’ve brought on additional staff who are working around the clock to manage members’ enquiries, but there is clearly more work to do,” Mr Elia said.
“Prior to the current COVID-19 crisis, Hostplus would typically receive around 100 financial hardship applications in an average week.
“The number of special early release applications we’ve received to date is around 360 times higher than our normal volume, and our call centre has experienced a 290 per cent increase in calls in addition to the more than 8,000 emails also being received per week.”
But the fund has remained confident in its cash reserves and liquidity position despite the influx of early release claims, stating it will remain comfortable in accommodating investment switches and routine benefit payments.
The total amount of cash available to Hostplus as at 18 May was reported to be $6 billion.
“The total sum of ERS payments requested by Hostplus members to date represents less than 2.6 per cent of the fund’s total funds under management,” Mr Elia said.
“The overall number of people requesting early release is also getting lower each week. With parts of the economy beginning to reopen, Hostplus expects this trend to continue.
Mr Elia added that a number of payments have been delayed to ensure “accurate and secure processing” as fraud runs rampant.
The AFP recently indicated it was investigating a scam where up to 150 Australian superannuation members had $10,000 wrongly released from their accounts.
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