Superannuation assets in aggregate were $2,146 billion ($2.1 trillion rounded) at the end of the September 2016 quarter, slightly up from the previous quarter which were $2,100 billion and now at an all time historical record level. Over the 12 months to September 2016, there was a 7.4 per cent increase in total superannuation assets.
Total assets in MySuper products were $492 billion at the end of the September 2016 quarter, up by 13.6 per cent from a year earlier.
Accrued default amounts continue to fall and were $39.6 billion, down from $51.9 billion a year earlier. Retail funds are responsible for the bulk of the remaining accrued default amounts. In September 2015 there were 2.5 million member accounts in total that included an accrued default amount.
Contributions to funds with more than four members over the September 2016 quarter were $23.2 billion, down 4.7 per cent from the September 2015 quarter. Total contributions for the year ending September 2016 were $103 billion, largely unchanged from the previous year ($104.6 billion).
In APRA regulated funds most employer contributions are now superannuation guarantee (SG) or for defined benefit with salary sacrifice only a small proportion of total employer contributions (less than 10 per cent). A reduction in concessional contribution caps as proposed in legislation currently before the Parliament will be likely to reduce this proportion further.
Personal contributions in the September quarter 2016 were $3,701 billion down from $5,201 billion the same quarter a year earlier.
The APRA-regulated sector average for investment returns was 7.4 per cent over the year to the quarter. This was across all investment options. The five year average annualised ROR to September 2016 was 9.1 per cent.
The main valuation effects that occurred during the September quarter 2016 were as follows: the S&P/ASX 200 increased 3.9%; the price of foreign shares, as represented by the MSCI World Index excluding Australia, increased 4.3%; and the A$ appreciated 2.7% against the US$.
As at the end of the September 2016 quarter, 49.0 per cent of the $1.4 trillion investments in APRA regulated funds were invested in equities; with 22.9 per cent in Australian listed equities, 21.8 per cent in international listed equities and 4.3 per cent in unlisted equities. Fixed income and cash investments accounted for 33.4 per cent of investments; 20.9 per cent in fixed income and 12.5 per cent in cash. Property and infrastructure accounted for 13.5 per cent of investments and 4.0 per cent were invested in other assets, including hedge funds and commodities.
Outward benefit transfers exceeded inward benefit transfers by $987 million in the September 2016 quarter. The outflow to self-managed superannuation funds (SMSFs) was $1,737 million in the quarter, down slightly from $1,763 million in the previous quarter. However, this is not large compared to the size of the SMSF sector and is not really driving growth of that sector. The asset share of SMSF continues to be static or showing a slight decline.
There were $17.0 billion in total benefit payments in the September 2016 quarter. Total benefit payments for the year ending September 2016 were $65.7 billion.
The number of APRA funds was unchanged in the September quarter. Fund merger activity amongst major funds has stalled for the time being in terms of completed mergers amongst larger funds.