Super news for October 2020

One-off super amnesty a success

Almost 24,000 employers have admitted to either not paying or underpaying super contributions to their employees dating back to July 1992 when the compulsory scheme first started.

Now up to $600 million will be placed into the superannuation accounts of nearly 400,000 Australians in a one-off superannuation amnesty.

The amnesty, which ran from May 2018 to September 2020, gave employers the opportunity to correct past mistakes with nominal interest and without having to face the usual penalties of up to 200%.

Deputy CEO of the Association of Superannuation Funds of Australia (ASFA) Glen McCrea congratulated Assistant Minister for Superannuation, Financial Services and Financial Technology, Senator Jane Hume, on the success of the initiative, saying it helps get more money in people’s super accounts where it belongs for their retirement.

With nearly $440 million already transferred into people’s accounts, the superannuation amnesty has been successful in reuniting Australians with money that in many cases, they didn’t know they were owed.

Acknowledging the burden on some employers, Senator Hume said the initiative was a once-only opportunity to come forward and “wipe the slate clean”.

Customers remain satisfied with super funds

The latest Roy Morgan’s Superannuation Satisfaction Report shows customer satisfaction was down 1.3% points last July compared to the previous month but is virtually unchanged on last year’s rating of 61.7%.

These ratings cover the first month Australians were able to stave off financial hardship by withdrawing a portion of $10,000 or less from their superfund accounts, which 1.2 million people did.

Industry funds have been the standout over the past year and were the only sector to increase customer satisfaction, up by 0.2% points to 63%. Satisfaction with public sector funds fell marginally, by 0.4% to 71.4%, but still retains the highest rating of any sector.

Customer satisfaction with retail funds was down 2.5% points to 54.9%, but easily the biggest decline was felt by self-managed funds, down a significant 10.4% points to 67.1%.

Only a year ago, people invested in self-managed funds were the most satisfied but now satisfaction with these funds is at its lowest in eight years since September 2012.

Unisuper won the highest customer satisfaction rating of the industry funds ahead of Care Super, AustralianSuper, Hostplus, HESTA, Cbus, Sunsuper, First State Super and REST Super. The highest placed retail super fund is Colonial First State followed by BT, OnePath, MLC and AMP.

The report’s findings are from Roy Morgan Single Source, Australia’s most trusted consumer survey, compiled by in-depth interviews with around 50,000 Australians each year.

Latest statistics for SMSFs

According to latest figures from the Australian Tax Office (ATO), Australia now has 593,375 self-managed super funds (SMSFs) privately run by 1,107,268 members.

A little more than half (53%) of SMSF members are men, 47% are women, and 86% are aged 45 or older.

The total estimated assets are just above $733 billion and top asset types are listed shares (26% of total SMSF assets) and cash term deposits (21%).

Based on the ATO’s SMSF annual return data, the average assets per SMSF member are $701,000 and median assets $424,000. Average assets per funds are $1.3 million and median assets $749,000. Member contributions into SMSFs are $12 billion and employer contributions $5.4 billion.

ASFA supports 40:40 Vision campaign

Industry superfund HESTA this month announced its ambitious 40:40 Vision campaign that aims to see women fill a minimum 40% of executive roles in the ASX200 by 2030.

The Association of Super Funds Australia (ASFA) supports the ambitious investor-led initiative and calls on the superannuation industry to join in.

ASFA CEO Dr Martin Fahy says he is committed to addressing the current gender imbalance in senior leadership in corporate Australia. “The next ten years will see a shift to a more knowledge economy,” Dr Fahy said. “If Australia is to achieve its full potential and compete internationally we can’t afford to continue to ignore the contribution of talented senior women executives.”

Early Release Scheme data

By mid-August, Australian superannuation fund members had made more than three million applications to withdraw their retirement savings under the COVID-19 Early Release Scheme, accessing more than $31 billion in payments.

Research by leading industry fund Cbus surveying more than 3000 of its members found that immediate financial need (59%) and concerns for future expenditures (27%) were the main reasons people decided to withdraw some or all of their savings.

About a quarter withdrew almost their entire account balance and 43% withdrew less than 20% of their funds. Nearly half of those surveyed either underestimated or didn’t estimate the impact of their withdrawal on their superannuation balance at retirement.

Surprisingly, those who had not lost working hours were more likely to withdraw due to future concerns or to protect their savings.

The survey also found that members who sought advice from Cbus and other sources, such as news services or social media, were half as likely to withdraw within one day or less than those who used no information sources. Members who spent a longer amount of time considering and who consulted more information services before withdrawing their savings held more realistic expectations of impacts on their retirement wealth.

Cybersecurity matters more than ever

The Australian Cyber Security Centre warns that as more businesses go digital and more employees work from home, the risk of cybercrime is greater than ever before.

This year’s Stay Smart Week, held from 7–13 October, offered advice to individuals and businesses on how to protect their data and personal information when using their phones, tablets and computers.

An alarming 43% percent of cyberattacks target small businesses and the global average cost of a single data breach is $3.9 million.

As office work moved to our personal homes during COVID-19, more hackers are leveraging the opportunity to break into vulnerable networks. In the US, the FBI has reported a 300% increase in reported cybercrimes since the pandemic.

Stay Smart tips for a cybersecurity health check include:

• Delete suspicious emails or text messages before opening them
• Don’t open chain letters received via email and never forward them
• Before clicking on a link in an email, hover over it to see the actual web address and where it will take you
• Create strong passwords – the longer the better – and change them regularly
• Never use the same password across multiple services or websites
• Always you have the latest anti-virus software installed.

For more information on how to protect all your devices, visit cyber.gov.au.