Superannuation assets in aggregate were $2,530 billion ($2.5 trillion rounded) at the end of the September 2017 quarter, up from the previous quarter which were $2,505 billion, and are now at an all time historical record level. Over the 12 months to September 2017, there was a 8.7 per cent increase in total superannuation assets. The figures for assets are higher than previously published as a result of the adoption of accounting standard AASB 1056, which has resulted in the recognition for the first time of public sector fund receivables from employer sponsors (basically amounts needed to cover unfunded defined benefit liabilities). APRA has also revised historical figures in line with the accounting standard.
Total assets in MySuper products were $610 billion at the end of the September 2017 quarter, up by 24.0 per cent from a year earlier.
Contributions to funds with more than four members over the September 2017 quarter were $23.4 billion, up 1.1 per cent from the September 2016 quarter. Lower contribution caps would have impacted on the growth in contributions. Total contributions for the year ending September 2017 were $117.2 billion).
In APRA regulated funds most employer contributions are now superannuation guarantee (SG) or for defined benefit funds, with salary sacrifice only a small proportion of total employer contributions (less than 10 per cent). The reduction in concessional contribution caps taking effect from 1 July 2017 will be likely to reduce this proportion further.
Personal contributions in the September quarter 2017 were $3.7 billion, down substantially from $17.0 billion the previous quarter. It is likely that in the June quarter some individuals were making use of the higher contribution caps applying prior to 1 July 2017.
The APRA-regulated sector average for investment returns was 6.9 per cent over the year to the quarter. This was an average across all investment options. The five year average annualised ROR to June 2017 was a healthy 8.5 per cent.
As at the end of the September 2017 quarter, 50 per cent of the $1.57 trillion investments in APRA regulated funds was invested in equities; with 23 per cent in Australian listed equities, 24 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. Property and infrastructure accounted for 13 per cent of investments and 4 per cent were invested in other assets, including hedge funds and commodities.
Outward benefit transfers exceeded inward benefit transfers by $1.2 billion in the September 2017 quarter. The outflow to self-managed superannuation funds (SMSFs) was $2,016 million in the quarter, up from $1,374 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 $17.3 billion in total benefit payments in the September 2017 quarter. Total benefit payments for the year ending September 2017 were $74.4 billion.
The number of APRA funds fell by one to 228 in the September quarter. Fund merger activity amongst major funds has stalled for the time being in terms of completed mergers amongst larger funds. However, some mergers are in prospect.