Statement on media reports on Ch9's ACA (A Current Affair)
Hostplus wishes to emphasise at the outset and clearly that it has never employed tactics designed to slow the processing of ER payments to its members. Such an allegation is demonstrably false and has no factual basis.
Particularly in times like these, when a large proportion of the population are facing financial uncertainty and hardship, it is incumbent on media organisations to report in an accurate, fair and balanced manner and to avoid sensationalist and misleading tactics designed to create community fear or anger.
As the points below demonstrate, Hostplus has been and remains fully committed to its members. Consistent with that objective, in the vast majority of cases Hostplus has processed ER requests quickly and securely.
As an Industry SuperFund of over 30 years standing Hostplus has always been, and proudly remains, members-first. This value has never been more important than it is today, as our community continues to work its way through the challenges raised by the COVID-19 pandemic.
I can reassure you that Hostplus is and will remain very focussed on delivering outcomes that are in the best interests of all of our members, and that includes processing and getting to those of our members in particular need their approved early release payments as quickly as we can, whilst equally ensuring that payments are made accurately, safely and securely.
As we know, the economic impact of COVID-19 has hit some harder than others, particularly those working in the hospitality, tourism, and retail sectors. Since the government's special early release program commenced several weeks ago, we have received more than 150,000 early release payment requests, totalling over $1Billion.
Importantly, the 5 day processing time which funds are expected to process most applications within once they receive an approved early release application from the ATO commences from when the fund receives that ATO approval, not from when a person makes their application for early release to the ATO.
95% of those requests have to date been paid within 5 days of us being notified of an approved request by the ATO. This fact demonstrates unequivocally our commitment and success so far in ensuring that ER payments are made quickly and in compliance with APRA best practice guidelines.
To date, Hostplus' fund administrator, Link/AAS, Australia's largest super fund administrator who are also used by other major funds such as AustralianSuper, REST, Cbus, and HESTA, have collectively received and processed an extraordinary 700,000 ER claim payments, totalling over
$5 billion, which represents over 50% of the all claims made so far and, which now totals sum 1.2 million applications representing ~$10.2 Billion.
While we are pleased we've been able to help so many members who've made the tough decision to access their super, we very much understand and empathise with those limited number of members whose early release payments are taking longer to process and get to them.
We genuinely regret these delays. However, in many cases these are fundamentally necessary to process payments safely and securely so that our members' money ends up where it should – in their hands and not with scammers or fraudsters, which the ATO has this week highlighted as a clear and present risk. Accordingly, whilst the delays are of course regrettable, they have arisen as an unavoidable consequence of the prudent measures we have and continue to take to ensure that our members' interests are protected in accordance with our paramount duty as a trustee.
At a time when fraudulent activity has increased, I can confirm that our rigorous processes are working well in this important requirement.
This, together with the sheer volume of requests, has impacted our ability to respond in a way that our members would expect, and we'd want. But, it hasn't and won't stop our determination to run very hard to get this important job done for our members.
One of the main indicators triggering our fraud checks is inconsistencies in the application. While most applications will ultimately pass these fraud checks, they are critical in ensuring that payments are processed securely. To date, our checks have protected a number of members' accounts from fraudulent attempts.
If there was any doubt as to the critical importance of our fraud checks, we have learnt today that Home Affairs Minister Peter Dutton has confirmed that "an element of fraud" was behind the Government's decision to halt the ER scheme.
In addition to the need to protect from identity fraud and scams, other key reasons for delays in the processing of ER applications include:
- Incorrect or inconsistent personal details on the application;
- The member has directly chosen and held investments in their account (e.g. shares or term deposits, etc) that are required to be sold to meet the ER payment request;
- A member has a zero balance in their account; and/or
- The member has an existing stop payment 'flag' on their account which may relate to a pension contributions adjustment, pending insurance claim, undischarged bankruptcy notice or a family law matter.
We deeply regret the delay some members are experiencing due to these necessary processing requirements and I can assure you we are working hard and around the clock to get these payment to our members as fast as possible, and in almost all cases, within a maximum period of 10 business days.