Open up super access to bushfire victims: IOOF

Wealth group IOOF is urging the federal government to further free up access to super for those in financial distress.

IOOF CEO Renato Mota. Picture: Aaron Francis

Wealth group IOOF is urging the federal government to further free up access to super for those in financial distress as it oversees a sweeping review of the $2.9 trillion system.

IOOF chief executive Renato Mota said more consideration was needed to allow easier access to super in times of financial distress, such those affected by natural disasters such as bushfires and victims of domestic violence.

“There must be a threshold of societal wellbeing,” he said.

“Let’s keep doing what we started, but at the same time we should be thinking about what it (super) can be used for.”

Mr Mota said while the debate had recently centred on whether to lift the rate of super contributions, discussion should also take into account longevity risk and record levels of household debt.

The government commissioned an independent review of the retirement income system in September, which will look at the Age Pension, compulsory super and voluntary savings.

Early access to super is already granted under “very limited circumstances” which include a terminal medical condition, permanent incapacity and “severe financial hardship”.

To qualify for the latter category you have must have received government income support payments continuously for 26 weeks and be unable to meet reasonable expenses.

The retirement income review comes after a tumultuous 12 months for IOOF following the Hayne royal commission’s stinging criticism and failed legal action by the prudential regulator. The group will finally complete the purchase of ANZ’s pensions and investments business on Friday.

The acquisition — which follows the earlier purchase of the bulk of ANZ’s financial planning arm — will see about 350 staff transfer to IOOF next week. A similar number are expected to join after the full separation of technology and other systems.

The deal was put on hold after the legal action by the Australian Prudential Regulation Authority started in December 2018, and the regulator also separately imposed licence conditions on IOOF.

Those actions led to the departures of former CEO Chris Kelaher and chairman George Venardos, despite APRA’s legal case against the company and several executives failing.

Mr Mota said IOOF was now benefiting from a fresh mindset and new team and he was “passionate” about culture.

But he is still on the hunt for a chief risk officer after the abrupt departure of Amanda Noble after just months in the role.

IOOF has tapped Lawrence Hastings, ANZ Wealth’s general counsel, as chief legal officer to take over from Gary ­Riordan.

Mr Mota said the ANZ deal would see IOOF break through $90bn in funds under administration, from about $44.7bn in portfolio and estate administration on last count.

He is targeting more than $100bn in the next few years.

IOOF will provide a funds under management and administration update before the week’s end. As at September 30, the total stood at $142.7bn.

Separately, the group has a big task ahead after disclosing $182.7m in customer remediation costs, as well as $40.4m in program costs, relating to reviews of advice and compliance practices.

IOOF’s shares have recovered strongly after sinking to $4.28 in late 2018.

Earlier this month the stock hit its highest close in 16 months at $8.31. On Wednesday it dipped 0.1 per cent to $7.86.

Fund manager Martin Currie’s senior analyst Matthew Davison said IOOF’s team had done a good job of stabilising the business over the past year and had “seemingly repaired” regulatory relationships.

“This year the focus moves back to fundamentals, with the business facing a tougher environment on platform margins,” he added.

“Renewed management, culture and governance structures place the group well to win in a world where scale players in advice prevail, although the profitability and shape of that industry is still uncertain. “Evolving the group’s advice strategy will clearly be a key this year, which they appear to be progressing well on.”