1,423 total views, 2 views today
The Authorised Super Funds of PNG (ASFPNG) has issued a media release acknowledging Parliament’s approval of amendments to the Superannuation General Provision Act 2000, legalizing a COVID-19 Withdrawal.
The ASFPNG had previously agreed to allow withdrawals subject to Parliament’s approval. It could not go ahead with the approval as the current superannuation laws did not allow it to do so. With many members greatly affected by the effects of COVID-19, the Government had initially agreed to help workers out through the withdrawal of their retirement savings. This is now possible.
The amendments, which enable the withdrawals to take effect was passed by Parliament on Thursday September 10th 2020.
The eligibility though isn’t for all members.
The release stated that members “who have had their employment terminated directly due to COVID-19” are eligible to apply. The limit as per the release is a one-off withdrawal of 20% of their own contributions with a cap at K10,000.
It is not certain as to exactly how many fall into this category. It was previously thought that even those “stood down” as opposed to being “terminated” would be eligible too but the wording of the release is more confined.
The ASFPNG further stated that “Once all formalities to operationalize the new amendment is completed, Authorised Super Funds will be able to lawfully process COVID-19 Withdrawals”. No exact time frame has been given although it is understandable that each superfund will vary given each has its “own processes, and members should expect to complete a specific form and provide employer verification that they have ceased employment due to COVID-19 circumstances”.
Only members are to apply for the COVID-19 withdrawals themselves as the AFSPNG will not accept any third party enquiries or lodgments.
Those members considering lodging applications are required to provide their ASF Member ID card or “an accepted form ID such as employer ID card, driver’s license or passport”.
Any member unemployed for three months will be eligible to receive a monthly unemployment payment equivalent to 50% of their last monthly salary. This avenue has always been part of the Superannuation Act which affected members can continue to take advantage of should they be eligible.
Other points to note from the release:
- Members who are already receiving monthly unemployment payments may have reduced their employee contributions balance however, will be eligible to withdraw 20% of their remaining employee contributions up to K10,000 under this new COVDI 19 amendment.
- Members who take a COVID-19 withdrawal will earn less interest, reduce their housing advance eligibility and ultimately, could result in up to K50,000 less in their account when they reach retirement age.
While there is an opportunity to having some cash in the pocket, the ASFPNG did warn that superannuation is essentially a savings and investment strategy that can be realized on retirement. Any early withdrawal will ultimately affect a members’ balance on retirement.
Accordingly, the ASFPNG has encouraged its members to consider all options before drawing on their superannuation savings. History has shown members who leave their funds longer within an ASF for an extended period of time, achieve much better retirement outcomes than those who exit much earlier.
For advice on the COVID-19 Withdrawal, members should contact their ASF.
Nasfund: Ph: 1588 | E: firstname.lastname@example.org
Nambawan Super: Ph: 1801599 (free call) | E email@example.com
Aon Master trust: Ph: 1805100, 7999 5100 I E: firstname.lastname@example.org
CTSL: Ph: 7998 7912 | E: MemberServices@ctsl.com.pg
Ian A Tarutia, OBE | CEO Nasfund
Paul Sayer | CEO Nambawan Super
Phil Gribble | CEO Aon Master Trust
Charlie Gilichibi |CEO CTSL