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That comes on top of the 40 funds who were already cash flow negative going into the COVID-19 crisis,’’ he said. “Our research has found that increased withdrawals from the ‘early release’ scheme alone could put 14 additional funds at risk of falling into a negative cashflow position in FY20. These competing forces are not sustainable for short to medium term and the result will be additional pressure on funds to merge or cut costs,’’ said Abhishek Chhikara, Associate Principal at Right Lane Consulting. “Australia’s superannuation system is confronting its biggest challenge ever as it attempts to manage the impact of ongoing rising costs while cashflows and revenues decline rapidly. The report says the unprecedented decision to allow members to take early withdrawals from their funds during COVID-19 will see some funds experience a decline in assets of as much as 6 per cent.Īcross the board, Right Lane believes, excluding investment performance, most funds will deliver modest or no growth in assets, and all funds in Australia will experience a decline in revenue in FY20. The Right Lane report says COVID-19 has sent not one but three shockwaves through Australia’s superannuation system – investment market shocks which have caused increased volatility in returns workplace disruption which has caused millions of workers to lose their jobs and stop contributing super and the significant policy change which has seen 3 million applications to withdraw up to $10,000 from their fund as part of the Government’s ‘early access scheme’. New analysis by consultants Right Lane has found that as many as 60 per cent of Australia’s superannuation funds, or 54 of 90 funds in total, could be in negative cash flows at the end of FY20. Many Australia’s superannuation funds have suffered a significant blow to cashflows, with one in five Australian workers withdrawing more than $23bn in superannuation assets through the Federal Government’s early release scheme. The unprecedented increase in withdrawals could cause as many as 60% of super funds to be in negative cashflows at the end of FY20.The ‘early access’ scheme has seen more than 3 million applications for withdrawing more than $23 billion in superannuation assets.The COVID-19 crisis is likely to accelerate the trend towards a more consolidated system, with fewer funds that deliver better outcomes for members.Majority of Australia’s super funds are likely to tip into negative cashflows