K63 Insurance and Superannuation Funds

Media Super poised for $62b Cbus link

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Original article by Joanna Mather, Michael Roddan
The Australian Financial Review – Page: 3 : 25-Jun-20

Media Super chairman Gerard Noonan has confirmed that the industry superannuation fund is in the "very early stages" of talks regarding a merger with Cbus. He stresses that Media Super is likely to retain its own branding if the deal proceeds. The fund short-listed Cbus and AustralianSuper as potential merger candidates following a tender process. Media Super has about 75,000 members and some $6bn worth of assets under management. Data from the Australian Prudential Regulation Authority shows that Media Super has lost an average of six per cent of its members annually over the past three years.

CORPORATES
MEDIA SUPER LIMITED, CONSTRUCTION AND BUILDING UNIONS’ SUPERANNUATION FUND, AUSTRALIANSUPER PTY LTD, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY

APRA probes super fund pain

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Original article by Gerard Cockburn
The Australian – Page: 16 : 25-Jun-20

The Australian Prudential Regulation Authority will increase its oversight of the nation’s superannuation funds in response to the coronavirus pandemic. APRA will require super funds to provide it with a range of data on both a monthly and quarterly basis for the duration of the health crisis. Amongst other things, APRA is concerned about the impact of the federal government’s early access scheme is having on super funds, with almost $16bn having been withdrawn to date.

CORPORATES
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY

Early access super requests near $15bn

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Original article by Gerard Cockburn
The Australian – Page: 15 : 16-Jun-20

Data from the Australian Prudential Regulation Authority shows that 2.12 million people have applied to withdraw money from their superannuation fund via the federal government’s early access scheme. Some $14.8bn has been paid out to 1.98 million fund members; AustralianSuper heads the list, having paid out $1.98bn to 264,404 members. The early access scheme has been criticised by the ACTU in a submission to a Senate committee hearing into the federal government’s response to the coronavirus pandemic.

CORPORATES
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, AUSTRALIANSUPER PTY LTD, ACTU

Insurers face big loss from income policies

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Original article by Michael Roddan
The Australian Financial Review – Page: 23 : 5-Jun-20

The Australian individual disability insurance sector has lost a combined $5 billion over the past five years. Australian Prudential Regulation Authority executive member Geoff Summerhayes warned in late 2019 that individual disability insurance products may soon become unviable in Australia if the industry did not take suitable action. However, despite his warnings and the sector’s ongoing losses, individual disability insurance providers are continuing to sell unsustainable products during the COVID-19 shutdown.

CORPORATES
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, CLEARVIEW WEALTH LIMITED – ASX CVW, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, WESTPAC BANKING CORPORATION – ASX WBC, AMP LIMITED – ASX AMP

Brace for negative super returns: Silk

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Original article by Richard Gluyas
The Australian – Page: 13 & 20 : 29-May-20

AustralianSuper’s balanced investment option has posted a return of minus 3.3 per cent for the year to April, following a coronavirus-induced rout in financial markets in the March quarter. CEO Ian Silk has warned that the balanced option is likely to post its first negative return for a financial year since the global financial crisis. However, he notes that the balanced option has delivered an average return of eight per cent over the last decade. Silk adds that some 200,000 AustralianSuper members have utilised the federal government’s early access scheme.

CORPORATES
AUSTRALIANSUPER PTY LTD

Super sector should shrink 80pc: report

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Original article by James Thomson
The Australian Financial Review – Page: 19 : 25-May-20

Management consulting firm Right Lane contends that a major rationalisation of Australia’s superannuation sector is necessary. Associate principal Abhishek Chhikara suggests that there is scope for 3-5 large "generalist" funds and 7-10 niche funds that are focused on specific industries or types of super products. Right Lane estimates that a super fund needs a minimum of 500,000 active members in order to operate efficiently, and ideally they should have between one and two million active members. The firm expects the pandemic to increase the pressure on smaller funds.

CORPORATES
RIGHT LANE CONSULTING

Medibank mulls cash refunds

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Original article by Joyce Moullakis
The Australian – Page: 16 : 7-May-20

Health fund Medibank Private expects its earnings and dividends to be in line with previous guidance, despite the coronavirus pandemic. Customers will save about $120m after Medibank opted to delay premium increases for six months, while CEO Craig Drummond has indicated that it may be open to providing partial refunds due to a fall in claims during the lockdown. NIB Holdings recently flagged the possibility of providing fund members with cash rebates due to the coronavirus.

CORPORATES
MEDIBANK PRIVATE LIMITED – ASX MPL, NIB HOLDINGS LIMITED – ASX NHF

APRA to probe super payouts

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Original article by Cliona O’Dowd
The Australian – Page: 17 : 1-May-20

The Australian Prudential Regulation Authority generally expects superannuation funds to release money under the federal government’s early access scheme within five business days. APRA requires super funds to provide it with a range of data every week regarding the early access regime, and a spokesman says it is prepared to pursue enforceable action against funds that do not pay eligible members within an appropriate time-frame. APRA is collecting both industry-level and fund-level data, which will be publicly disclosed.

CORPORATES
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY

Billions of early super released

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Original article by Cliona O’Dowd
The Australian – Page: 13 & 17 : 24-Apr-20

The Australian Taxation Office has already approved 456,000 applications from superannuation fund members who want to utilise the federal government’s early access scheme. Some $3.8m worth of withdrawals have been approved since the scheme opened on 20 April; more than 900,000 people had previously registered interest in the scheme, which is restricted to fund members who have experienced financial hardship due to the pandemic. Association of Super Funds of Australia CEO Martin Fahy has downplayed concerns that some super funds may face liquidity issues due to the early access scheme.

CORPORATES
AUSTRALIAN TAXATION OFFICE, AUSTRALIA. DEPT OF THE TREASURY, THE ASSOCIATION OF SUPERANNUATION FUNDS OF AUSTRALIA LIMITED

ASX equities to be hit by forced selling as workers grab super

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Original article by Melissa Yeo
The Australian – Page: 20 : 23-Apr-20

Matthew Ross of Goldman Sachs estimates that up to $44bn could be withdrawn from superannuation funds by people who have been financially hit by the pandemic, compared with the federal government’s forecast of $27bn. The early access scheme may result in liquidity issues for some super funds, which could in turn be forced to reduce their exposure to shares. Ross says this could potentially reduce the benchmark S&P/ASX 200’s market ­capitalisation by around 0.45 per cent.

CORPORATES
GOLDMAN SACHS AUSTRALIA PTY LTD, STANDARD AND POOR’S ASX 200 INDEX