Corporate funds hit hard by second round withdrawals

Members have taken funds out at a much higher rate than their industry super fund counterparts.

Members have taken funds out at a much higher rate than their industry super fund counterparts.

Corporate funds have been hardest hit by the second round of early super release, with members taking funds out at a much higher rate than their industry super fund counterparts.

The government’s COVID-19 early release of super scheme, which allows Australians with reduced incomes to access their super in two tranches of up to $10,000, has seen more than 4.4 million access their super early.

And although the funds with the largest total financial outflows are industry giants like AustralianSuper, the proportion of members who went back to withdraw money for a second time is far higher among retail funds and corporate funds, according to the Australian Prudential Regulatory Authority.

The high representation of corporate funds may reflect layoffs and financial stress among professions and white collar workers as the economy slows.

Topping the list of repeat withdrawals is the Super Direction fund operated by AMP, where the level of funds paid out is running at 80 per cent of the first round.

The fund, which has more than 185,000 members, saw a staggering 116,782 applications for early withdrawal, 48,613 of which were repeat applications. Overall, $540m was withdrawn from the fund early.

Elsewhere Holden Employees Super — the fund behind the auto major that plans to wind down Australian operations — saw its second round withdrawals running at 65 per cent of the first instalment. In February General Motors announced it would retire the iconic brand in Australia and New Zealand, leading to the loss of hundreds of design and engineering jobs by June.

Also among the top 10 is the Qantas Superannuation Plan for current and former employees of the airline, where second round withdrawals are running at 62 per cent.

In June the airline announced it would cut 6000 jobs and stand down a further 15,000 staff.

More than 12,000 applications were made to access super early through the scheme, with 7600 members going in for the first round last financial year and 4600 returning this financial year. In total, $116m of retirement savings were withdrawn from the fund.

The only industry super fund to make the top 10 was Maritime Super, with 6615 overall applications, 2420 of which were repeat applications, leading to $39.5m being withdrawn or 60 per cent of the first round.

By comparison the nation’s biggest super fund, AustralianSuper saw a 45 per cent second round withdrawal rate.

Across all funds, $33.5bn has been withdrawn by Australians.