Superannuation Statistics Review
Much has been written regarding APRA’s recently released Annual Superannuation Bulletin. Released in Feb 2012, this report contains information to June 2011 regarding the overall superannuation system in Australian, encompassing Corporate, Industry, Retail, Public Sector and Small superannuation funds.
These data shed light on a number of issues; here are my top 3 points of interest from the report.
Number of Funds
The first positive point that stood out to me was that the number of member accounts dropped by 4.6% to 31.3 million. We are all aware of the benefit of consolidating super, and so it is good to see a reduction in the number of accounts as this happens.
To a large extent, this is simply the result of superannuation providers remitting ‘lost super’ balances to the ATO, thereby reducing the amount of small account balances. It remains to be seen to what level the reduction in the quantum of accounts is the result of members proactively consolidating their own balances, as opposed to legislatively imposed measures.
This statistic also shows there is plenty more work to do, as the number of existing accounts is still over 31 million – well over 1 per person in this country.
Self Managed Super Funds
The growth of the SMSF sector is continuing unabated. During the period covered by this report, the number of them grew by 7.2% to 442,528. The wealth held within these funds is also considerable- $407.6 billion to be exact. This is more than double the amount only 5 years ago ($202.6 billion in 2006). Given that total superannuation assets at 30 June 2011 was $1.34 trillion, we can see that 30% of superannuation assets are held within SMSF.
Average Member Account Balance
By far and away, ‘small fund’ members (which includes the SMSF sector) held on average the largest account balance, with $484,243 at the end of the period. In contrast, Industry funds members were at the other end of the scale with an average account balance of $21,895- a difference of a whopping 95%.
What can we learn from this? Looking behind the statistics, there are a number of possibilities. Could it perhaps be that SMSF members are more active with their retirement savings, intentionally sacrificing more of their income into superannuation? Perhaps it’s due to members with existing large balances who decide to commence a SMSF as a cost saving measure? Alternatively, is it because of the large number of small business owners that use a SMSF to own business real property? ATO data indicates that the last segment is perhaps smaller than is generally thought, but overall it’s likely that a combination of the above factors is what has resulted in the larger small fund balance.
Of course, these statistics are based on all superannuation accounts in Australia, and it behoves each individual to look at their own arrangements to ensure they are on track for a successful retirement. To review your situation and see if this is the case, feel free to contact Andrew Moore of Specialised Business Solutions on 07 3221 1100. SBS is a Brisbane Accounting Firm that also specialises in Retirement advice. Andrew is a qualified Financial Planner who can help you tailor a suitable financial plan to help you reach your financial goals.
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