Super Trends from APRA and the ATO

27 January 2016

Both the Australian Prudential Regulation Authority (APRA) and the Australian Taxation Office (ATO) have recently released superannuation statistics.  The former deals with the superannuation sector while the latter is concerned with self managed superannuation funds.

From APRA

The APRA statistics (September Quarter 2015) show that the pace of consolidation of the $2,000 billion super industry has materially slowed down in the 12 months to the end of September 2015.  While the number of corporate funds has reduced from 41 to 36 (presumably by transferring assets and members to retail and industry funds) there has been no consolidation amongst the industry and retail funds (remaining at 43 and 147 respectively).

There also has been a small increase in the number of small APRA funds which are funds with less than five members where the trustee must be a licensed trustee company.  Small APRA funds have increased from 2,417 to 2,429 in the 12 months to September 2015.  The reason for this increase is not provided.  Possibly the increase is due to self managed superannuation funds changing status because their members are permanently moving overseas or because their members no longer wish to be responsible for the management of the funds. 

In terms of fund assets, the APRA statistics indicate that three of the four sectors of the superannuation industry; namely industry funds, public sector funds, retail funds and SMSFs – have, surprisingly, experienced asset growth in that order.  Industry funds have had the highest rate of asset growth of 10.8% in the 12 months to September 2015 while SMSFs have had the slowest rate of asset growth in the same period of 3.9%.  Again, surprisingly, public sector funds have had a growth rate of 9.5% compared to retail funds growth rate of 6.9%, over the same 12 month period.

While the SMSF sector may have had the slowest rate of asset growth, they clearly have the numbers with 562,466 SMSFs in operation at 30 September 2015, an increase of almost 28,000 funds in 12 months.

The APRA statistics also show that more than 98% of super monies invested in MySuper products are invested in generic versions of MySuper products with less than 2% of those monies invested in tailored MySuper products.

From the ATO

The ATO has recently released a comprehensive statistical overview of the SMSF Sector for the 2013/14 financial year – with the information extracted from lodged returns, fund registrations and auditor contravention reports.

In one paragraph the ATO describes the SMSF Sector as “making up 99.5% of the number of super funds, 29% of the $2 trillion total superannuation assets as at 30 June 2015.  There were 557,000 SMSFs holding $590 billion in assets with more than 1 million SMSF members”.

In another paragraph the ATO states “Over the five years to 30 June 2014, the average assets of SMSFs grew by 23% and reached more than $1 million for the first time in 2014.  Likewise, average assets per member increased to $564,000, the highest over the period.”

Beyond the headlines the overview reveals the following:

  • Members of newly established SMSFs tend to be from younger age groups when compared to the total SMSF population – the median age of members of newly registered SMSFs in 2014 decreased to 50 – obviously, new SMSFs are for the young at heart.
  • About 53% of SMSFs are not paying at least one pension (solely in accumulation phase), while 39% of SMSFs are partially in pension phase (paying at least one pension but having at least one accumulation account) and the balance of 8% of SMSFs are entirely in pension phase (only having pension interests).
  • As at 30 June 2014 - $12.8 billion of SMSF investments were held under limited recourse borrowing arrangements with SMSFs having $13 billion in borrowings relating to such assets.
  • As at 30 June 2014 – assets subject to limited recourse borrowing arrangements represented about 2.3% of the total value of assets held by SMSFs.
  • Over the 5 years to 2014 the proportion of SMSFs with limited recourse borrowings increased from 2.3% of funds in 2010 to 6.7% of funds in 2014.
  • In 2014, 53% of all SMSFs were solely in accumulation phase, 11% were both in accumulation and pension phase while 36% were solely in pension phase.
  • Over the five years to 2014, SMSFs solely in accumulation phase have reduced from 62% to 53%.
  • 22,000 SMSFs commenced paying their first pension during 2014.
  • In 2014, 82% of all benefit payments from SMSFs were in the form of a pension (compared to 68% in 2010).   (The ATO cautions that the dramatic increase may, in part, be due to improved data collection).
  • In 2014, more than 87% of all pensions being paid are account-based pensions (including allocated pensions) with about 13% of pensions being paid, being transition to retirement pensions.  (Note: the ATO collection data does not distinguish between account-based pensions and other types of pensions – such as defined benefit pensions and market linked pensions.  Consequently, the figure of 87% may overstate the number of account-based pensions.)
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