Highlights

  • RBA Assistant Governor Brad Jones identified unexpected early superannuation withdrawals as a potential financial stability risk, particularly during periods of market disruption.
  • During the COVID-19 period, some superannuation funds experienced net outflows equivalent to approximately 5–6% of assets, while most experienced outflows of around 1–2%.
  • Jones indicated that advance notice of changes to early-access policies would allow superannuation funds to adjust their products and liquidity arrangements.
  • The RBA highlighted the importance of distinguishing planned retirement withdrawals from unexpected demands for cash during financial market stress.

Australia's superannuation system could face additional liquidity pressures if unexpected early withdrawal arrangements coincide with financial market disruptions, according to comments from the Reserve Bank of Australia (RBA).

During a panel discussion at the Super and Wealth Summit in Melbourne on 26 October 2026, RBA Assistant Governor (Financial System) Brad Jones examined the financial stability implications of allowing members to access retirement savings before their usual retirement eligibility.

His remarks focused on the timing and predictability of withdrawals rather than expressing a position on whether early superannuation access should be expanded.

Jones drew on the experience of the COVID-19 period to explain how sudden withdrawal demands can influence fund liquidity and investment management.

What Did the RBA Learn From COVID-19 Withdrawals?

The COVID-19 period provided an opportunity to examine how Australia's superannuation funds respond when members withdraw savings unexpectedly.

Jones explained that the RBA had assessed the withdrawal patterns experienced by funds during that period.

According to the findings discussed, several funds recorded net outflows equivalent to approximately 5–6% of their assets.

For most funds, the corresponding figure was approximately 1–2%.

Although these percentages differed across the sector, Jones characterised the larger outflows as substantial.

The experience demonstrated that sudden changes in withdrawal behaviour can create uneven liquidity demands across superannuation funds.

Funds with larger withdrawal obligations may need to draw on cash holdings or other liquid investments to meet member payments.

Why Unexpected Withdrawals Matter More During Market Stress

Liquidity refers to the ability of a fund to meet its financial obligations when payments become due.

Superannuation funds generally invest across a range of assets, including equities, fixed income, property and infrastructure.

Some assets can be converted into cash relatively quickly, while others may require longer periods to sell.

Unexpected withdrawal demands can become particularly challenging when financial markets are already under pressure.

Jones explained that sudden early access during a crisis could create difficulties if market liquidity was constrained at the same time.

In such circumstances, funds may face competing requirements to meet withdrawal requests while managing investment portfolios during volatile conditions.

The severity of these pressures would depend on the timing of withdrawals, the assets held and the availability of liquid resources.

Why Advance Notice of Policy Changes Is Important

An important distinction raised by Jones concerned whether early withdrawal arrangements are announced in advance or introduced unexpectedly.

He explained that a policy change communicated sufficiently early would provide superannuation funds with an opportunity to prepare.

Funds could review their investment arrangements, liquidity requirements and product structures before the change took effect.

This preparation could reduce the need for rapid portfolio adjustments during periods of financial stress.

However, Jones indicated that unexpected access arrangements introduced during a crisis could produce more challenging liquidity conditions.

His comments therefore identified predictability as a significant consideration in assessing the financial stability implications of early withdrawal policies.

Employment Support Also Influenced Withdrawal Patterns

Jones discussed the role of employment conditions during the COVID-19 period in shaping the level of superannuation withdrawals.

He suggested that outflows might have been larger without the introduction of JobKeeper.

The employment support program helped maintain connections between workers and employers, reducing some of the financial pressures associated with pandemic-related disruptions.

According to Jones, maintaining employment relationships was relevant to limiting the scale of withdrawal demands.

This observation illustrates the connection between labour market conditions and retirement savings liquidity.

When households experience sudden income disruptions, their need for accessible financial resources can increase.

Could Early Access Affect the Broader Financial System?

Australia's superannuation sector manages more than AUD 4.4tn in assets, making its investment and liquidity decisions important to domestic financial markets.

Funds hold substantial investments across various asset classes, including Australian equities and fixed-income securities.

During periods of financial stress, unexpected withdrawal requirements could influence how funds manage cash and investment holdings.

If multiple funds needed to sell financial assets simultaneously, their activity could add to existing market liquidity pressures.

However, Jones did not state that expanded early access would necessarily trigger widespread financial instability.

Instead, his comments identified the circumstances in which withdrawal demands could become more challenging, particularly where unexpected policy changes coincided with market disruption.

How Is the Superannuation Sector Preparing for Future Liquidity Demands?

The RBA is also examining longer-term changes to the structure of Australia's retirement savings system.

As more members enter retirement, some superannuation funds are expected to experience higher regular withdrawals.

Jones highlighted that a growing proportion of funds could move into net cash outflow positions as the sector matures.

This development differs from emergency early withdrawals because normal retirement payments can be incorporated into long-term liquidity planning.

Nevertheless, both developments reinforce the importance of matching investment arrangements with expected cash requirements.

Jones also identified increasing foreign exchange hedging obligations and larger holdings of domestic financial assets as additional considerations for future liquidity management.

Key Insights

The RBA's examination of early superannuation withdrawals highlights the importance of liquidity planning during periods of financial market uncertainty.

COVID-19 withdrawal experiences demonstrated that funds can face materially different cash outflow requirements, with some recording net outflows equivalent to 5–6% of assets.

Jones emphasised that unexpected policy changes during a crisis present greater financial stability challenges than arrangements communicated in advance.

As Australia's superannuation system continues to mature, withdrawal patterns, liquidity management and financial market conditions will remain important considerations for regulators and fund operators.

Q1. What did the RBA say about early superannuation withdrawals?

Assistant Governor Brad Jones indicated that unexpected early withdrawals could create liquidity challenges, particularly during periods of financial market stress.

Q2. How much money flowed out of superannuation funds during COVID-19?

Jones stated that some funds experienced net outflows equivalent to approximately 5–6% of assets, while most recorded around 1–2%.

Q3. Why does advance notice of early-access policies matter?

Advance notice allows funds to adjust liquidity arrangements, investment portfolios and product structures before withdrawal requirements change.

Q4. Did the RBA forecast higher inflation from early superannuation access?

No. Jones stated that the RBA had not specifically modelled the scenario of early withdrawals generating additional inflation pressures during the discussion.

Q5. What other liquidity challenges face Australian superannuation funds?

Increasing retirement withdrawals, foreign exchange hedging requirements and changing investment holdings could influence future liquidity management.