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Summary
- Superannuation assets are slightly down compared to the previous year, largely due to the market crash in March 2020.
- APRA data revealed that the industry super funds now hold $163.3 billion more assets than the retail funds.
The Australian Prudential Regulation Authority (APRA) has released the superannuation statistics for September 2020. Over the year to September 2020, the assets under super products fell 1.6% to $2,891.3 billion compared to $2,939.7 billion.
From the total assets, APRA regulated funds fell 0.8% to $1,953.8 billion compared to $1970 billion in the same period last year.
MySuper products, which come under APRA regulated funds, fell 3.3% to $753.6 billion compared to $779.2 billion in September 2019.
Assets under self-managed super funds were down by 4% to $728.2 billion compared to $758.5 billion in September 2019.
The fall in overall superannuation assets reflects the investment losses incurred by the funds during the March quarter when the market crashed.
But there was an increase of 1.8% in the balance of life office statutory fund assets, which reflects internal restructuring undertaken by some entities in the June quarter.
Image Source: © Kalkine Group 2020
APRA noted that the Early Release Scheme saw the payment of $34 billion, adding to the benefit payments, which over the year to September 2020 increased by 42% to $112.3 billion.
Net contribution flows were negative for the second quarter running at -$6.4 billion and are down 73.4% over the year September 2020 at $10.2 billion.
Industry funds trial retail funds
APRA regulated industry funds now constitute $761 billion compared to $597.7 billion in the retail funds. Industry funds are $163.3 billion higher than the retail funds.
Over the year to September 2020, assets under retail funds fell by $34.7 billion, but assets held by industry increased by $13.6 billion. During the same period, there was an increase of $7 billion in public sector funds and a fall of $2.1 billion in corporate funds.
The superannuation industry has been under a debacle in the recent time after the Retirement Income Review presented its report.
Labor Government had introduced the superannuation scheme decades ago. Now the arguments are among the policymakers is whether the superannuation contribution should be increased to 12% from 9.5%.
The Retirement Income Review noted that the planned increases during the pandemic would not be a perfect time since businesses are going through a rough patch.
It was also noted that an increase in the super contribution will likely impact the wage growth given the increased burden on employers.
Scott Morrison Government stated that a decision on the planned increase of 0.5% in the super contribution would be decided at the time of next year’s budget, which is due in May 2021.
