12 May Qld’s Intrust drags feet on super claims
Joanna Mather and Michael Roddan – The Australian Financial Review – Tuesday 12 May 2020
Early access scheme A small Queensland-based superannuation fund for hospitality workers paid just a quarter of early access claims within the requisite five business days, blaming precautions against fraud for the delay.
Intrust chief executive Brendan O’Farrell said the fund was paying claims “as soon as practicable” but had been held up by checks to block criminals.
“We need to ensure that unscrupulous operators are not defrauding our hard-working members of their retirement savings,” he said in a statement late on Monday.
Reports of a small-scale yet possibly sophisticated rort of the scheme led to a suspension of claims processing on Friday while the Australian Tax Office tightened controls, but the process resumed on Monday.
Australian Prudential Regulation Authority figures show Queenslandheadquartered Sunsuper released $784.8 million in retirement savings to members in the first two weeks of the government’s early access scheme, the most of any super fund in the country.
Sunsuper is the default fund for Virgin Australia staff but a spokeswoman said airline staff were not disproportionately represented among the 108,280 members who claimed an average of $7248.
“We’re a multi-industry fund with members across many industries,” she said. “We’re seeing impact across the board.”
Relaxed hardship rules allow people made redundant by the pandemic to access up to $10,000 of their super this financial year, plus another $10,000 when the new financial year begins on July 1.
The average processing time for early access claims was 3.1 business days for the fortnight from April 20 to May 3, the Australian Prudential Regulation Authority said yesterday.
Industry funds continue to bear the brunt of claims, with the top four funds – Sunsuper, AustralianSuper, Hostplus and REST – accounting for $2.7 billion of $6.3 billion paid out to May 3.
In fact, payments across the industry have already topped $10 billion but there is a seven-day lag on APRA figures. The $10 billion figure is within Treasury’s estimates for the scheme.
Sunsuper made 100 per cent of its payments within the five days recommended by APRA. Intrust, a $2.9 billion fund which has so far paid out $64 million, had the worst processing times.
Only a quarter of members received their money within five days, although in 73 per cent of cases the money arrived within six to nine business days. Qantas Super has also been comparatively slow to clear applications, with 44 per cent paid within five days.
It came as the Australian Securities and Investments Commission confirmed it is continuing to probe unionand-employer-backed super fund lobby group Industry Super Australia about its controversial modelling of the impact of withdrawing savings.
As revealed by The Australian Financial Review, ISA last week overhauled the assumptions underpinning its modelling after suffering criticism from Treasury, which has resulted in the future cost of a $20,000 withdrawal by a 30-year-old falling from an estimated $97,214 to $79,393 in its warning to access super as a “last resort”.
Responding to questions on notice from Liberal senator James Paterson, ASIC said it had written to ISA on April 20 in which the regulator “expressed concern” the group had used questionable assumptions.
“Contrary to the ASIC principles, the ISA modelling did not use the same assumptions as the generic calculator on the ISA website,” ASIC said. ”
ASIC is reviewing ISA’s changes and will then consider its next steps.”
Mr Paterson said: “ISA has been busted by ASIC using different assumptions to suit their own interests. How can anyone rely on their numbers when their methodology changes to fit their argument of the day? This is not a good faith way to participate in public debate.”