Important update from the CEO
March 23rd, 2020
Following the terrible bushfires that impacted many First Super members and the communities where they live and work, we now find ourselves facing the challenge of the COVID-19 virus.
With financial markets changing daily, we want to assure you that we are constantly monitoring the situation and making careful and well-considered decisions to protect your hard-earned superannuation savings.
Our main areas of focus are to ensure:
- that First Super member services continue;
- that pension payments are made on time; and
- that we have in place robust, tested procedures that enable our core business operations to carry on throughout the current crisis.
Current market uncertainty
We know you must have a lot of questions about this ever-changing situation and how this affects your First Super account. With this in mind, we’ve produced a video to help you better understand the reasons behind the current market volatility and provide guidance on how we believe you should be dealing with the uncertainty that the impact of the COVID-19 virus is having on your retirement savings.
I urge you to take a few minutes to watch the video. If you have any questions, please contact our Member Services Team on 1300 360 988.
You can also see up-to-date information on the Fund’s investment performance on our Investment Returns and Crediting Rates web page.
Temporary early access to super
As part of the Federal Government’s economic response to the COVID-19 crisis, announced on Sunday 22 March, there is a key change regarding early access to superannuation savings that may apply to you.
While recognising that superannuation is designed to help workers save for retirement, the Federal Government is conscious that some people may be at risk of significant financial hardship due to the COVID-19 crisis.
Eligible individuals will be able to apply directly to the ATO through the myGov website to access up to $10,000 of their superannuation before 1 July 2020. Then, if eligible, members will be able to access up to a further $10,000 from 1 July 2020 for approximately three months.
Members will be able to apply for this payment from mid-April 2020 – we will provide an update on the application process as more information becomes available.
To apply for early release of your superannuation, you must satisfy any one or more of the following requirements:
- you are unemployed: or
- you are eligible to receive a job seeker payment, youth allowance for job seekers, parenting payment (which includes the single and partnered payments), special benefits or farm household allowance; or
- on or after 1 January 2020,
- you were made redundant; or
- your working hours were reduced by 20 per cent (1/5th) or more; or
- if you are a sole trader, your business was suspended or there was a reduction in your turnover of 20 per cent or more.
Members who access their super will not pay any tax on amounts released and the funds withdrawn will be not affect Centrelink or Veterans’ Affairs payments.
You can read more information in this Early access to superannuation fact sheet.
Changes for pension members
For those of you who receive the Age Pension, further changes have been announced about how this income will be assessed to reflect the current interest rate environment and its impact on income from savings.
From 1 May 2020, the upper deeming rate will be 2.25 per cent and the lower deeming rate will be 0.25 per cent. This change is on top of the Federal Government’s announcement on 12 March that deeming rates would be reduced by 0.5 percentage points.
The Federal Government is also temporarily halving the superannuation minimum drawdown requirements for pension accounts (i.e. the minimum amount of account balance that you must withdraw each year) for the 2019/20 and 2020/21 financial years.
This measure is designed to reduce the need for members like you to have to sell investment assets to meet minimum drawdown amounts during the current market volatility.
The table below shows the changes.
|Age||Current minimum drawdown rates||Rates reduced by 50% for the 2019/20 and 2020/21 financial years|
|95 or more||14%||7%|
Here to help
As always, if you have any questions or concerns, please contact the First Super Member Services Team on 1300 360 988.
First Super is focused on ensuring the safety and security of your superannuation savings and that our operations continue as planned.
Putting our members first continues to be our priority.
I hope you and your loved ones stay safe and well during these challenging times.
Chief Executive Officer