Industry super funds often only have around $1 of actual cash in their bank accounts. Yup, you read that right.
Background: Industry super funds are Aussie super funds that started out being specifically for workers in certain industries (i.e. HESTA for nurses, Rest for retail workers). And they carry around $850 billion of super money.
What happened: These super funds are not-for-profit and membership-based, which means they don't have any shareholders. And without any shareholders, they've only got around $1 of actual cash in their bank accounts. Yup, you read that right.
What else: Earlier this year, the government passed a new amendment called the Section 56 Amendment. And now, these industry super funds are saying if they get hit with a fine, they could become insolvent.
💡The Section 56 Amendment means that industry super funds aren't allowed to use their members' money to pay for fines from January 1 2022.
💡 The scary thing is that industry super funds only have a couple bucks in their accounts (the other $850 billion belongs to members). This means that if a super fund gets fined, it could cause the super fund to become insolvent (because they don't have enough money to pay the debt).
💡Now, industry funds are trying to find out whether they can charge members a new fee...or use their existing reserves of cash...to pay a fine if they cop one. Eeep!
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