Superannuation Funds Brace For Possible Deluge Of $10K Early Access: COVID-19

 

In response to the ongoing COVID-19 pandemic, the Australian government has passed legislation to allow affected individuals early access of up to $10,000 from their superannuation. Due to the fast-paced nature of the crisis, superannuation funds and administrators are working vigorously to provide members with the support, services and information they need. 

To indicate demand, 2.3 million people logged in to the myGov website and 300,000 lodged an intention to claim JobSeeker payments on Wednesday 25 March alone (source ABC). Modelling by super funds indicates as many as 3 million people could become eligible to make a withdrawal, totalling more than $30bn (source The Guardian).

Super fund contact centres and financial advice services have in some cases quadrupled with inbound enquiry. Establishment of remote contact centre and administrative operations appears to be successful, but not without challenges.

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WHAT WE KNOW

  • Members affected by the COVID-19 outbreak can access up to $10,000 tax-free on compassionate grounds from their superannuation account from mid-April 2020 and then again after 30 June 2020. 

  • Superannuation withdrawals will not affect Centrelink or Veterans’ Affairs payments.

  • Members must first contact the ATO to start the process. The ATO will decide on eligibility and then inform the superannuation fund if the payment is to proceed. 

  • Members can register their interest now by logging in to their myGov account and following the ‘intention to access coronavirus support’ instructions.

  • The super fund will commence processing of the early access payment. 

 

WHAT HAS CHANGED

  • The Australian government has ordered non-essential workers to stay home and work remotely.

  • Most larger super administrators will retain their document processing staff on site as essential workers but that is not possible for all administrators.

  • Some super funds have set up remote home offices with scanning and shredding facilities to receive member forms via post. 

WHAT ARE THE COMPLICATIONS

  • Fund rules do not allow for this early release, tax-free payment.
    (policy, procedure, systems / technology)

  • Variable quality of infrastructure in remote locations may prohibit efficiency.
    (technology)

  • Members are contacting the superannuation funds directly.
    (communications)

  • Increased response times due to higher volumes are frustrating members.
    (capacity)

  • Most contact centre consultants can only provide general advice rather than personal advice for a member’s situation adding to the frustration.
    (customer experience)

  • Fund employees are stretched to meet demand, leading to overtime and fatigue.
    (human resources)

  • The nature of processing and administering member accounts from the homes of employees is stretching security and privacy obligations.
    (regulatory compliance)

  • COVID-19-related superannuation scams and cybersecurity concerns have emerged including fake myGov websites, emails and text messages.
    (security)

It is expected that members will seek advice on whether to take the early access payment in greater numbers. This is on top of other enquiries relating to income protection claims, diminishing account balances, switching investment options and other concerns.

With an entire workforce being made to work from home, rolling out new policies and procedures quickly and effectively is difficult. Managing the flow of information, the accuracy of member data, keeping staff updated on rapid changes and ensuring that consistent communications are delivered to members is crucial to reduce member frustrations when tensions are so high.

 

HOW CAN QMV HELP

QMV offers flexible and timely advice and consulting support to the superannuation sector. We can provide standalone advisory, mobilisation of a consulting team or an individual resource.  

QMV is here to help with the extenuating challenges and additional workload faced by your organisation via: 

  • Advice and strategy for immediate priorities and subsequent strategic vision for 2020/21.

  • Project strategy, direction and oversight. 

  • Preparation of policy and procedure documentation.  

  • Delivery of online specialist support to your remote workforce.  

  • Technology uplift and data management. 

  • Risk, regulation and compliance. 

  • Communications strategy for internal staff and members. 

Please contact QMV at any time day or night; we’re here to help. 

I can be contacted directly on mvaughan@qmvsolutions.com and +61 413 082 011.

Michael Wilcox national manager, strategic partnerships at QMV is available on mwilcox@qmvsolutons.com and +61 472 817 237.

 

Best regards, 

Mark 

Mark Vaughan - Managing Director 

QMV provides trusted advisory, consulting and technology to Australia’s leading superannuation, insurance, banking and wealth management organisations. For further information please telephone our office p +61 3 9620 0707 or submit an online form.

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