“However, it was an extreme event and allowing people to access super in times of financial distress has helped a number of households.
“When I think about the liquidity impacts, obviously timing is everything and a lot of super funds were seeing switching to lower risk options which created liquidity demands, they were seeing falling Australian currency which created liquidity demands on their hedges, and in addition to having early release on top it obviously added to that liquidity stress to funds.”
Sawtell-Rickson said now the challenge was investment strategy.
“As we think about the future, if early release is now a new tool that is available and likely to be used in the most extreme situations when markets are likely to be in stress, suddenly we need to think about our liquidity budgeting differently,” she said.
“I’m not denying there is a trade-off between these two things but what I object to is the only thing on the table is to stop the 2.5% super guarantee increase with no guarantee of anything.
“If the SG guarantee does not go ahead there will be no increase in super, missing out on hundreds of thousands of dollars in retirement, and no wage increase. There won’t be a trade-off for a senior exec in a financial services firm but if you’re a hotel cleaner on minimum wages they suffer the most as they miss out on increase in super and wage increase under proposition put forward.”
There were a further 21,000 superannuation members who applied for the early release of their super in the week before the scheme ended, with 31% representing repeat applications, according to data.