News

ATO, Superannuation

Actuaries want greater ATO involvement in super relief

ATO coronavirus relief

A call has been made for the ATO to play a more active role in the early release of superannuation benefits as a coronavirus financial relief measure.

The Actuaries Institute has called for the ATO to become more actively involved in the relief measure allowing individuals early access to their superannuation to alleviate financial stress caused by the coronavirus.

Specifically, the professional body has proposed a solution that may eliminate the need for superannuation funds having to realise capital losses by selling equity positions when market values are at a low point to cover liquidity requirements associated with this measure.

“There may be a need for the funds and the government to look at ways to enable early access and smooth out the ability and capacity of funds to pay,” Actuaries Institute superannuation practice committee convenor Tim Jenkins said.

“A possible solution is for the ATO, in addition to making the determination, to distribute the payments to further streamline the process to get money into the hands of those in need quickly.

“The ATO could then invoice the superannuation funds over the following few months to spread the cash-flow impact on funds.”

Institute of Actuaries chief executive Elayne Grace pointed out realising losses on the sale of assets was not the only concern for super funds associated with this relief measure.

“Some of the key issues include liquidity for funds, locking in losses for individual investors before investments have time to recover and also if superannuation balances fall to zero, there are issues around insurance,” Grace said.

“We know large parts of the community have insurance through their super fund. We want people to have access to their funds to help them through very difficult times, but it is important to know and map the consequences.”

She noted the institute wants to encourage the government to restore and maintain the integrity of the superannuation system when the current COVID-19 crisis is over.

Legal early access to superannuation is one of the relief measures the government announced to alleviate financial hardship resulting from the coronavirus pandemic.

Copyright © SMS Magazine 2020

ABN 43 564 725 109

Benchmark Media

Site design Red Cloud Digital