Governments around the world are springing into action to leverage and safeguard pension pots during the COVID-19 economic and market turmoil.

Australia in March allowed workers to withdraw $10,000 for this financial year and the next from their superannuation savings if their employment has been affected by COVID, in a move that was panned by the opposition and industry funds lobby.

Australia is not the only country to allow early access to retirement savings during COVID-19 – the United States and India have made similar allowances.

The US is allowing people to withdraw from their retirement plans such as 401(k) plans, 403(b) plans and traditional IRAs, as a part of its US$2 trillion stimulus package, called the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).

Those who have been diagnosed with COVID-19, have a spouse or dependent who was diagnosed with it, or are experiencing financial hardship from quarantine, job losses, or childcare are able to take up to US$100,000 from their accounts until December 31 without having to pay the 10% penalty usually applied for early withdrawals by people below 59.5 years of age.

Adviser reaction in United States for the US$100,000 withdrawals has been similar to Australia, where many have warned of the long-term balance impact of withdrawing the $20,000 now.

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