The ongoing COVID-19 pandemic is changing the way many in our industries work and live. Businesses are adapting to new legislation and policies on an almost daily basis and have had to make difficult decisions during this uncertain time.
At Hostplus, we’ve made changes to the way we work so we can continue to service all our members. That includes keeping employers updated on how the unfolding situation might affect their business and offering information and support wherever possible.
We suggest you bookmark this page so you can easily come back for more information and updates. You can also find fact sheets to download and share with your employees at any time.
For key information for your employees please encourage them to visit hostplus.com.au/covid19
I hope you’re managing well in these extraordinary times. July marked the start of a new financial year; one that will hopefully present fewer challenges and hardships for our world, nation, and local communities.
The recently ended 2019-20 financial year was a difficult one in many respects. From the catastrophic bushfires of last summer, followed by regional floods, to the emergence of the current COVID-19 pandemic which triggered a confronting global health emergency that continues to cause widespread economic and social challenges. These events, along with the downturn of the financial markets earlier this year, have combined to adversely impact our economy, our employment and jobs, our social norms and structures, and more broadly our general way of life.
I’d like to update you on the fund’s performance over the past 12 months.
Hostplus’ Balanced (default) option returned -1.85% for the year to 30 June 2020, net of fees, while our next most popular option, Indexed Balanced, delivered a net return of +0.19%. Notwithstanding these single year results, I’m pleased to advise that Hostplus has remained a solid performer compared to Australia’s leading superannuation funds over longer term periods. Based on the most recent SuperRatings survey,1 Hostplus has delivered top-quartile returns over rolling five to twenty year periods, including our Balanced (default) option having been ranked 4th over seven years, 3rd over ten years and 4th over twenty years.
While this strong historical performance is not a guarantee of future performance, it demonstrates our ability to overcome short term market downturns. Our investment approach and beliefs take into account investment cycles; that is, the fact that markets go up and down, and the likelihood of several periods of negative investment performance over a 20 year timeframe. Our Balanced investment option’s strategy and risk appetite means we anticipate a negative return about once every 4-5 years, on average. While such periods are never desirable, it’s important to remember that super is generally a long-term investment and as such, investment cycles need to be viewed over the longer term too.
What this means for your employees’ super balance
For your employees invested in our default Balanced investment option, they may have seen a small decrease in their balance over the 12 month period, after any contributions or withdrawals. This is the first time in 11 years that our Balanced option has delivered a negative return – since the time of the global financial crisis – and only the fourth negative return in Hostplus’ 32 year history.
To find out more about our investment returns for the Balanced option and all our other investment options, please visit our website.
Investment strategy and approach
While the 2019-20 financial year was certainly a challenging one, our long-standing and well-diversified approach to investments helped to limit the negative impacts of financial markets. A core part of this strategy is to spread our investments across many different types of assets, such as shares, property, cash, infrastructure, and more, so that if one type of investment falls in value, the other assets can cushion the fall. It’s an ‘all weather’ approach that helps to smooth out investment returns over time.
We have achieved our long-term results through several financial market downturns in the past, including the ‘dotcom bubble’ in the early 2000s, and the European sovereign debt crisis and global financial crisis in 2008-09. During periods of particularly high volatility, I believe it’s especially important to keep focused on managing risks and maintaining the discipline needed to protect your employees’ investments in the short term and deliver sustainable growth over the longer term.
One low admin fee, unchanged for 16 years
Throughout these crises, we’ve taken the active decision to keep our administration fee as low as possible. Our admin fee of $1.50 per week hasn’t changed for 16 years, and is the lowest out of the major super funds in Australia.2 It’s also a “flat” fee, meaning it’s not calculated as a percentage of your employees’ total balance, unlike some other funds. So, members don’t pay a higher administration fee as their balance goes up over time, meaning more money in their own pocket.
Extension of financial assistance relating to COVID-19
The Federal Government has extended both the JobKeeper and JobSeeker schemes for an additional six months. Adjustments have been made to eligibility criteria and stepped reductions will be made to both payments from September 2020. The JobKeeper payment will also be split into two payment tiers based on the employee’s average working hours in February 2020.
The Government also announced an extension of the Early Release of Superannuation scheme. Fund members will now have until 31 December 2020 to access up to $10,000 from their super to help them meet their financial obligations during the uncertainty of the COVID-19 pandemic. If your staff are experiencing loss of income as part of COVID-19, they may be eligible for the JobKeeper payment and may be able to access some of their super as part of the early release scheme. More information is available at hostplus.com.au/covid19/employers.
Amnesty on super payments for employers
On 6 March 2020, the Federal Government introduced a Super Guarantee (SG) amnesty. The amnesty allows employers to disclose and pay previously unpaid Super Guarantee Charges (SGC). As many businesses return to more traditional operating models, reopening closed doors and welcoming in-store patrons and customers, your staff may begin transitioning back to a more familiar pay cycle. This includes a return to regular super contributions.
If you have outstanding SG payments from past periods, the SG amnesty remains in effect until 7 September 2020 and allows businesses to make any outstanding SG payments without the additional concern of penalties or fines. Outstanding payments made after the amnesty period ends may attract extra charges and costs. You can learn more about the SG amnesty by visiting the ATO website. https://www.ato.gov.au/business/super-for-employers/superannuation-guarantee-amnesty/
I know that many of our contributing employers and members have experienced hardship through shuttered businesses, unemployment or reduced working hours, or have suffered setbacks due to natural disasters over the past year. For many of us, the year ahead is an unclear one.
Regardless of your location, situation, or outlook, at Hostplus we will continue to strive to deliver on our mission to help your employees realise a dignified retirement, whether that’s around the corner or still many decades away.
Thanks, and take care.
In March 2020, the Federal Government enacted the ‘JobKeeper’ scheme, to help keep more Australians in jobs and support businesses affected by the significant economic impact caused by the Coronavirus (COVID-19).
On 21 July 2020, the Government announced it is extending the JobKeeper Payment until 28 March 2021 and is targeting support to those businesses and not-for-profits who continue to be significantly impacted by the Coronavirus./td>
Eligible employers who elect to participate in the JobKeeper scheme can claim a fortnightly payment of $1,500 per eligible employee on their books as at 1 March 2020.
For each eligible employee (or business participant ) who worked 20 hours or more per week on average during the four weeks before 1 March 2020: The fortnightly payment of $1,500 will be reduced to $1,200 from 28 September 2020 and to $1,000 from 4 January 2021.
For each eligible employee (or business participant ) who worked less than 20 hours per week on average during the four weeks before 1 March 2020: The fortnightly payment of $1,500 will be reduced to $750 from 28 September 2020 and to $650 from 4 January 2021.
Employer eligibility is based on the size of the turnover of the business. Not-for-profit entities, including charities, and self-employed individuals (i.e. businesses without employees) that meet the applicable turnover tests are eligible to apply for JobKeeper payments too.
According to the ATO*, employers will be eligible for the JobKeeper payment if all of the following apply:
*Correct at 24 July 2020. Please refer to the ATO website regularly for the most up to date and relevant information.
To determine if your business satisfies the “turnover test”, please visit www.ato.gov.au/General/JobKeeper-Payment/In-detail/JobKeeper-tests/Applying-the-turnover-test/
Employers will also have ongoing reporting obligations to the ATO as part of the JobKeeper scheme which are important to be aware of. You can find more information about these on the ATO JobKeeper website.
Employers do not have to be part of JobKeeper for the whole duration of the program. Employers can join at any time provided the employer enrols in the program prior to the end of the relevant fortnightly period from which they intend to participate and meet other requirements. If an employer is participating in the JobKeeper scheme, they must include all eligible employees.
The fortnightly payment will be made available to employees who:
The above list is a guide only. Please visit www.ato.gov.au/General/JobKeeper-Payment/Employers/Your-eligible-employees/ for a complete and up to date list of requirements for eligible employees.
Eligible employers who choose to elect to participate in the JobKeeper scheme can register their interest via the ATO website.
For further information on JobKeeper, including eligibility criteria, or how to apply, visit the Treasury website.
Employers must continue to pay Superannuation Guarantee (SG) on employees’ ordinary earnings for any staff who continue to work regular or reduced hours, even if a portion of these earnings are funded by the JobKeeper payment. Accordingly, where an employee is paid more than $1,500 per fortnight for work performed, the employer’s superannuation obligations will not change. If an employee’s wages are topped up to $1,500 per fortnight by the JobKeeper payment (for example, where they are stood down or earn less than $1,500 for the work performed), it is up to the employer whether they want to pay SG on any additional amounts paid by the JobKeeper payment. This information is based on the ATO guidance currently available.
Bob continues to be employed and is working his regular (or amended) hours which results in wages of $2,000 per fortnight. His employer registers for the JobKeeper scheme and receives $1,500 per fortnight to subsidise Bob’s fortnightly earnings of $2,000. The employer will be required to pay SG on the full $2,000.
Jenny continues to be employed and is working regular (or amended) hours which results in wages of $1,000 per fortnight. Her employer registers for the JobKeeper scheme and receives $1,500 per fortnight to fully subsidise Jenny’s fortnightly earnings of $1,000. Jenny will be paid the full $1,500 per fortnight. The employer will be required to pay SG on the payment of $1,000. SG will not be required (under current guidance) on the additional $500.
Sue has been stood down from her role, however her employer maintains her employment, albeit with no working hours. Her employer registers for the JobKeeper scheme and receives $1,500 per fortnight to provide Sue with an income. Sue will be paid the full $1,500 per fortnight. The employer (under current guidance) is not required to pay SG on the $1,500 paid to Sue.
On 6 March 2020, the government introduced a superannuation guarantee (SG) amnesty. The amnesty allows employers to disclose and pay previously unpaid super guarantee charge (SGC), including nominal interest, that they owe their employees, for quarter(s) starting from 1 July 1992 to 31 March 2018, without incurring the administration component ($20 per employee per quarter) or Part 7 penalty.
If employers want to participate in the amnesty, they must apply by 7 September 2020.
The ATO understand that employers may wish to apply for the amnesty and may be concerned that, as a result of COVID-19, their circumstances may change and they will not be able to pay the liability.
The ATO has several options that allow businesses to be more flexible with their payments, including:
For more information or to apply visit the ATO website.
Eligible small, medium and not-for-profit businesses that employ staff may be able to receive up to $100,000 in temporary cashflow support. This can go towards rent, utilities and retaining staff. For more information or to apply, visit the Treasury website.
Eligible small businesses employing fewer than 20 employees who retain an apprentice or trainee may be eligible for a wage subsidy of 50% of the apprentice’s or trainee’s wages paid during 9 months from 1 January 2020 to 30 September 2020. Employers will be reimbursed up to a maximum of $21,000 per eligible apprentice or trainee ($7,000 per quarter). Final claims for payment must be lodged by 31 December 2020. For more information visit the Federal Government’s Business website.
There is a temporary increase to the threshold at which creditors can issue a statutory demand on a company, and the time companies have to respond to statutory demands they receive. The threshold for creditors issuing a statutory demand on a company will increase from $2,000 to $20,000, and the threshold for the minimum amount of debt required for a creditor to initiate bankruptcy proceedings will increase from $5,000 to $20,000. For more information visit the Federal Government’s Business website.
There are a range of resources available to help employers and their staff during these uncertain times, a few of which are listed below.
In addition, Hostplus has partnered with its group life insurer, MetLife and ME, the bank built and supported by Industry SuperFunds, to provide our members and their contributing employers with a suite of helpful tools to assist and support them.
MetLife’s fact sheet below provides information on identifying and understanding the symptoms of mental ill health so that we can better support each other and stay connected as best we can.
ME’s well regarded financial wellness modules provide a free online course to help members manage their money better, providing useful tips in these times of uncertainty around money basics, budgeting and financial wellbeing.
We also encourage businesses with Employee Assistance Programs to assist their staff to engage with these important internal resources where appropriate.
We understand the COVID-19 pandemic and related business and social disruption has led to a deal of anxiousness, and in some cases significant financial stress, for some of your employees. And while the longer-term need to plan for retirement is important, we recognise that for some people there are more immediate needs and requirements.
Hostplus Superannuation Advisers licensed by Link Advice Pty Ltd and Hostplus Financial Planners licensed by Industry Fund Services Ltd are here to help them. The experienced team can provide timely, personal, advice to help Hostplus members with guidance and support, whether it is an immediate, short-term cashflow or budgeting need, or a longer-term objective, including:
To arrange a discussion with a Superannuation Adviser or Financial Planner, your employees can simply complete the Contact a Financial Planner form and select the ‘COVID 19 cash flow assistance’ option for the ‘How can we help you?’ question.
Consider the relevant Hostplus Product Disclosure Statement (PDS) available at hostplus.com.au and your objectives, financial situation and needs, which are not accounted for in this information, before deciding if Hostplus is appropriate for you. Hostplus has engaged Industry Fund Services Limited (IFS) ABN 54 007 016 195, AFSL 232514 to facilitate the provision of personal financial advice to members of Hostplus. Advice is provided by financial planners who are Authorised Representatives of IFS. Fees may apply. Further information about the cost of advice is set out in the relevant IFS Financial Services Guide, a copy of which is available from your financial planner.
Hostplus Superannuation Advice Consultants are Authorised Representatives of Link Advice Pty Ltd ABN 36 105 811 836, ASFL 258145 and facilitate the provision of limited personal advice about Hostplus products to Hostplus members through Super Adviser. Please call 1300 734 007 to obtain a Link Advice Financial Services Guide. Link Advice is responsible for any advice obtained through Super Adviser.