Superannuation assets totalled $2.9 trillion at the end of the September 2020 quarter. Over the 12 months from September 2019 there was a 1.6 per cent reduction in total superannuation assets.
Total assets in MySuper products totalled $754 billion at the end of the September 2020 quarter. Over the 12 months from September 2019 there was a 3.3 per cent decrease in total assets in MySuper products.
The reduction in the value of assets over the year to the September quarter 2020 was due to the significant downturn in local and overseas financial markets as a result of COVID-19. However, the reduction in assets over the 12 months period was modest, reflecting investment earnings in quarters other than the March quarter 2020 and inflows of contributions. Outflows of benefits under early release arrangements also had a downwards impact on total assets.
Investment earnings were positive in the September quarter 2020 at 1.9 per cent on average for funds with more than four members, which in conjunction with positive investment returns in the June quarter has led to a substantial recovery from the negative 10.3 per cent average return in the March quarter.
For APRA regulated funds:
There were $27.7 billion of contributions in the September 2020 quarter, a decrease from the June 2020 quarter and also 2.8 per cent less than in the September 2019 quarter. Personal contributions for the September 2020 quarter of $4.4 billion were 19.1 per cent lower than for the September 2019 quarter. Total contributions for the year ending September 2020 were $120.2 billion.
There were $33.9 billion in total benefit payments in the September 2020 quarter. The high benefit payments in the June 2020 and September 2020 quarters reflect a spike in lump sum payments caused by the Early Release Scheme that commenced on 20 April.
Quarterly net contribution flows (contributions plus net benefit transfers less benefit payments) to the industry were negative for a second consecutive quarter. Lower contributions coupled with high benefit payments resulted in net contribution flows of negative $6.4 billion in the September 2020 quarter, compared with the negative net contribution flows of the June 2020 quarter (-$2.1 billion).
The annual industry-wide rate of return (ROR) for entities with more than four members for the year ending September 2020 was -1.1 per cent and was 1.9 per cent in the September quarter 2020. The five year average annualised ROR to September 2020 was 6.0 per cent.
As at the end of the September 2020 quarter, 50 per cent of the $1.9 trillion investments were invested in equities; with 21 per cent in Australian listed equities, 25 per cent in international listed equities and 4 per cent in unlisted equities. Fixed income and cash investments accounted for 33 per cent of investments; 21 per cent in fixed income and 12 per cent in cash. The cash allocation is back towards pre-pandemic levels, largely reflecting underlying member switching activity and the bulk of expected Early Release scheme payments having been completed.
Property and infrastructure accounted for 14 per cent of investments and 3 per cent was invested in other assets, including hedge funds and commodities.