Public servants tap super for $620m

More than half a billion dollars has been siphoned from default state government public sector super funds during the pandemic.

More than half a billion dollars has been siphoned from default state government public sector super funds by members claiming financial hardship because of COVID-19.

Weekly figures released by the Australian Prudential Regulation Authority show that funds representing the bulk of state government employees collectively paid out more than $620m through the early super release scheme as at May 24.

About 73,000 withdrawal requests have been made to ­QSuper, VicSuper, First State, Tasplan and SuperSA since the implementation of the financial support measure in April.

The scheme was introduced by the federal government to ­assist people who had become unemployed or experienced a reduction in working hours during the economic downturn.

The Treasury on June 3 noted 1.9 million people had lodged applications with the tax office, draining the country’s near $3 trillion superannuation pool of about $15.3bn.

A fund member can access up to $10,000 through the scheme in both the 2020 and 2021 financial years.

The Australian understands no state government department has announced job cuts or reduced working hours during the pandemic.

Queensland’s QSuper fund, which looks after the retirement savings of many Queensland public sector staff, has dished out $265m to 33,595 members as of June 1, representing 6 per cent of its total membership base.

QSuper is the wealth provider for the state’s police, health, education and parliament services.

Until 2017, the fund was only open to Queensland government employees. QSuper said the average age from members requesting withdrawals was 40, with a median payment of $8750.

“We don’t foresee any future issues with our ability to invest given total withdrawals under the early release scheme so far represent less than 0.3 per cent of fund assets and we remained cash-flow positive through the recent market volatility,” a QSuper spokeswoman said.

The South Australian and West Australian government funds are not regulated by APRA, and are therefore not obliged to disclose amounts released through the scheme.

The entities are known as public sector exempt funds, which are regulated by the state governments.

South Australia’s SuperSA fund said it had processed 3700 applications through the early release scheme, totalling $32.8m. The fund can only be accessed by state government employees, but a member can retain an account if they leave the public sector.

WA’s Government Employee Superannuation Board is advertising that it is processing withdrawal claims.

The Australian approached GESB for comment regarding funds paid to members, but it did not reply.

According to GESB’s website, the fund is only open to the WA public sector and benefit contributions can only be made by an active state government employee.

First State Super, which is the main fund to public sector employees in NSW, has received 27,700 claims totalling $240m.

First State Super chief executive Deanne Stewart said the fund remained in a strong financial position as a large proportion of members worked in essential service industries.

“Our members largely work in health, education, emergency services and the public sector, and are currently at the frontline of helping our community to respond to the COVID-19 pandemic,” Ms Stewart said.

“For this reason, we have not faced the same levels of early ­access requests as some of our peers.”

VicSuper has paid $83m to nearly 7000 members. Chief executive Michael Dundon said the amount requested by members was below initial forecasts. The fund has been open to non-government workers since 2000.

Tasmania’s Tasplan has paid 9618 members about $75.3m. APRA’s yearly superannuation statistics show Tasplan has $11.4bn in total assets under management.

The Northern Territory Superannuation Office has received 54 withdrawal requests, but has not yet paid a single ­member.