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Superannuation sector posts worst quarter on record

Australia’s superannuation sector has seen its worst quarter on record, with account balances plummeting by over 10 per cent and the sector’s total assets shrinking by almost 8 per cent.

The Australian Prudential Regulation Authority said significant downturns in global financial markets caused by the coronavirus pandemic had wiped 10.3 per cent from retirement savings account balances in the March quarter, with the sector’s total assets shrinking by $200 billion to $2.7 trillion.

In quarterly figures released on Tuesday, APRA found funds had rushed to increase cash buffers from 9.5 per cent to 13.6 per cent ahead of the federal government’s early access to super scheme, which allows out of work Australians to withdraw two instalments of $10,000 from their retirement savings.

Two of the country’s largest super funds, Hostplus and UniSuper, were revealed to have zero per cent allocated to cash in their balanced fund options – those funds most members are automatically put into, according to APRA data. Only two other funds, ChristianSuper’s ethical option and Russell Investment’s Master Trust, had the same cash allocation levels.

Super funds have boosted cash reserves as the sector reports worst quarter on record.

Super funds have boosted cash reserves as the sector reports worst quarter on record. Credit:iStock

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