ASFA: Early release of super scheme emptied 1 million accounts

New analysis by the Association of Superannuation Funds of Australia (ASFA) shows the true impact of the Early Release of Super (ERS) scheme implemented during the COVID-19 pandemic lockdowns. Almost one million accounts were emptied, however, those accounts belonged largely to women, single parents and unemployed people, leaving already small balances at zero.

Around three million Australians accessed their superannuation savings early, with many dipping in twice. Close to one million people either closed or almost completely emptied their accounts.

The analysis shows that a 30-year-old who removed $20,000 in 2020 will now retire with about 43,000 less, assuming no more voluntary contributions are made and they retire at age 67.

ASFA deputy chief executive Glenn McCrea said: "While superannuation was able to do much of the heavy lifting by distributing payments to people quickly in the early days of the COVID-19 pandemic, it's important that we recognise the detrimental impact that this has had for the retirement savings of millions of Australians,"

"It's more important than ever that we legislate the objective of super to ensure that Australians' savings are preserved to support a dignified lifestyle in retirement."

Super funds coped well with the massive withdrawals, with nothing ever happening previously of the same scale. Funds made $38 billion in payments during stressed financial markets and processed 4.9 million applications for payments during extreme lockdowns.