Super pool shrinks before nest egg raids

THE economic downturn sparked by the coronavirus pandemic caused Australia’s pool of superannuation savings to shrink almost 8 per cent even before people tapped into their nest eggs early.

Figures released yesterday by the Australian Prudential Regulation Authority revealed total assets held by super funds contracted 7.7 per cent in the three months to March.

The financial regulator reported the fall had been fuelled by significant downturns in global financial markets, which were rattled in March due to COVID-19.

The statistics cover the period just before the Federal Government’s implementation of the early super withdrawal scheme that allows Australians to pull out up to $10,000 both this financial year and next.

The scheme is available to people who have been stood down from employment or experienced a reduction in working hours.

Self-managed super funds slumped further, falling by 9.4 per cent compared to the December quarter.

Super contributions rose 6.9 per cent to $121.1 billion compared to the same quarter in the previous year, while the total paid in benefits was $85.8 billion, a rise of 14.5 per cent.

A net inflow of funds of $45.4 billion during the March quarter represented a rise of 27.7 per cent compared with the same quarter in 2019.

The next round of quarterly super fund statistics, due to be released by APRA on August 25, will indicate the broader effects of the early withdrawal scheme.

The Australian