Super now worth $1.93 Trillion

By Martin North, cross-posted from the Digital Finance Analytics Blog

The Australian Prudential Regulation Authority (APRA) today released its December 2014 Quarterly Superannuation Performance publication and December 2014 Quarterly MySuper Statistics report. At 31 December 2014, total assets, which include the assets of self-managed superannuation funds and the balance of life office statutory funds, rose to $1.93 trillion, an increase of 9.3 per cent from the December 2013 quarter.

Contributions to funds with more than four members over the December 2014 quarter were $26.1 billion, up 15.3 per cent from the December 2013 quarter ($22.7 billion).  Total contributions for the year ending December 2014 were $100.6 billion.

There were $15.2 billion in total benefit payments in the December 2014 quarter, an increase of 9.4 per cent from the December 2013 quarter ($13.9 billion).  Total benefit payments for the year ending December 2014 were $56.4 billion.

Net contribution flows (contributions plus net rollovers less benefit payments) totalled $10 billion in the December 2014 quarter, an increase of 14.9 per cent from the December 2013 quarter ($8.7 billion).  Net contribution flows for the year ending December 2014 were $39.4 billion.

APRA has revised the method of segmentation it uses for these reports.  The segments that APRA most commonly uses for superannuation are fund types. These fund types comprise corporate funds, industry funds, public sector funds, retail funds and small superannuation funds. These segments, based on RSE licensee profit status and the membership base of the funds. These segments, based on RSE licensee profit status and the membership base of the funds, are shown below.

APRA-SuperFund-Segmentation-Dec-2014Corporate funds are RSEs with more than four members under the trusteeship of a ‘not for profit’ RSE licensee and with a corporate membership basis.
Industry funds are RSEs with more than four members under the trusteeship of a ‘not for profit’ RSE licensee and with either an industry or general membership base.
Public sector funds are RSEs with more than four members under the trusteeship of a ‘not for profit’ RSE licensee and with a government base membership base. Public sector funds also include superannuation schemes established by a Commonwealth, State or Territory law (known as exempt public sector superannuation schemes).
Retail funds are RSEs with more than four members under the trusteeship of a ‘for profit’ RSE licensee with a corporate, industry or general membership basis.
Small funds are superannuation entities with fewer than five members and include small APRA funds (SAFs), single-member approved deposit funds and self-managed superannuation funds (SMSFs). SMSFs are regulated by the ATO and have different legislative requirements than APRA regulated funds.

Of the 258 entities in existence at 31 December 2014, there are 45 cases where the fund type is different under the new segmentation methodology. In these cases, APRA analysed the information reported to APRA, the structure of the fund and composition of the RSE licensee as well as other prudential information. APRA also drew on publicly available information and consulted RSE licensees in the cases where the information reported on SRF 001.0 was inconsistent. Following this further analysis, of the 45 entities:

  • 38 entities were re-classified from corporate to retail;
  • four entities were re-classified from industry to retail;
  • one entity was re-classified from retail to industry;
  • one entity was re-classified from corporate to public sector; and
  • one entity was re-classified from industry to public sector.

After the review of fund types, retail funds’ assets increased from $502 billion to $516 billion and account for 39 per cent of total superannuation assets as at 31 December 2014. Industry funds’ assets decreased by $15 billion from $418 billion to $403 billion and account for 31 per cent of total superannuation assets as at 31 December 2014. Public sector funds’ assets increased by $15 billion to $335 billion (to 26 per cent of total superannuation assets), while corporate funds’ assets decreased from $63 billion to $58 billion (to four per cent of total superannuation assets).

Comments

  1. Hello MB readers,

    Could someone tell me why the government does not use some of this money to building projects that add to productivity across the country?

    It otherwise is doing nothing!

    • bill

      That is the equivalernt of the Government seizing private assets. These funds are invested both here and overseas.
      So first who would we sell the invest,ments to in ordser to have funds for said infrastructure? Foreign owners?

      Second how do we fund the extra CAD that would be automatically generated by the redirection of those funds in the infrastructure direction and thus through the economy.. Yes if we sold all the assets now held in the Super funds to foreigners that would fund the CAD. However again we would have a large batch of assets gone to fund what? Urban infrastructure so people in Sydney and Melbourne can get to the shops and restaurants faster?

      • Hi flawse,

        I agree on your points but what about funds held as cash, where is that held, please don’t say the big four banks

    • Because it’s my f’n money, and I’m not investing in some loss-making pork-barrel road in some marginal seat!

      And to Billriskas who replied to Flawse above, my cash component is not doing nothing – it is debt funding for banks to lend to people or business, and it earns me money. I currently sacrifice a higher potential return for its safety and accessibility for when investment opportunities arise.

      • I am being a bit repetitive here, TT, but did you realise that bank cash deposits, through a super fund, are not covered by the Government ADI guarantee scheme as are your direct bank cash deposits?

      • “cash deposits, through a super fund, are not covered by the Government ADI guarantee scheme “

        Presumably the Fund still qualifies for a single guarantee of $250,000 per ADI??

        For a billion dollar fund that it is, of course, insignificant. But for a small self-managed fund with several bank accounts it might be significant.

        Is this correct? Or are superannuation funds expressly excluded?

      • Hi CP, I realise this, but they’re still covered by “depositor first”, so I’d hope that this puts me above bond holders. You never know after the Cyprus depositor haircut though – I wonder if rules are different here.

        Still, a depositor haircut of 10%, if bond holders were equally reduced, should be more than enough to recapitalize a bust bank in a housing crisis. Remember they’re geared 50 times at the moment – lose 2% and they’re gone.

        I should get at least 90% of my cash back, which is better than can be said for any other asset class at the moment.

      • innocent bystander

        @SM
        “Presumably the Fund still qualifies for a single guarantee of $250,000 per ADI??

        For a billion dollar fund that it is, of course, insignificant. But for a small self-managed fund with several bank accounts it might be significant.

        correct.
        SMSF treated the same as private deposits.
        at least that is my understanding from 2 sources (1 a bank, 1 an advisor)

    • That is the long-term plan:

      a) to prohibit lump sum withdrawals; and

      b) to force funds to “invest” in qualifying private infrastructure projects (“PPPs”).

      The rate of return offer by PPP arrangers to compelled funds will immediately fall to reflect the fact that the funds have no choice. It will, in effect, be a form of roundabout taxation.

      Given that the other side of PPPs is a stitched-up deal between the politicians and their banker/contractors Mates (i.e. it’s a private “negotiation” with no effective competition), the extra profit from such forced “investment” will go straight into the pockets of the Mates.

      A similar arrangement (without the PPPs) existed under the old superannuation system up until 1985. Under the “30/20 Rule” qualifying funds were required to invest 30% of their portfolios in government and semi-government bonds, of which 20% had to Commonwealth government bonds.

      The added scam today is that the money will be diverted through PPPs to allow the rent-seekers to clip the ticket on the way.

      • “a private negotiation with no effective competition”

        Is that a bit like a “competitive evaluation process”?

  2. [email protected]

    How’s this for full of shit syndrome.
    Does he qualify?

    http://www.smh.com.au/federal-politics/political-news/assistant-treasurer-josh-frydenberg-shifts-his-work-super-into-unionbacked-industry-fund-20150219-13j49f.html

  3. What’s the average fee take again – 1.6 per cent? That’s a tidy $31 billion paid out to Sydney’s eastern suburbs for 2014. A shite load of new Beemers….

    Good to see that people are finally waking up to this con and switching to lower fee funds…..oh hang on.

    • lol moderate.

      1.93 trillion AUD woohooo, good thing our currency is still strong so that those numbers actually mean something.

      This country had a beautiful chance at parity to buy stakes in companies that actually produce the things that this country does not.

      We still have this chance at a moderately high currency. We need to peg our wealth to tech and industry that actually produce a standard of living in this world.

      But no we have decided it was and is a lot better to pump up our realestate and subsequently stock market. To pay a yeild for little productivity and distort the minds of many Australians about how real wealth is actually made.

      • The Traveling Wilbur

        Spot on. Everything. And it has had the side effect of finally insipiring a proper definition for the term ‘trickle-down’:

        Trickle-down is what you get when the guy who’s yacht you’re working as a waiter on takes a pee on your shoes.

  4. $1.93 trillion.

    Thats too much wealth for the looters in Canberra to ignore for much longer.

    How long till we go full Argentianian nationalisation of people’s hard earned life savings ? 20 years ? I’d say 40 years tops.

    Imagine all the pink batts, school halls and NBNs we could build !

    • What sensible person would keep their super in Australia? BB’s are going to blow it in the first ten years of their retirement and that means a lot of selling. They’ll kill each other in the stampede to the door.