Superannuation Trends

The superannuation system continues to register strong growth.

As of 30 June this year, total superannuation assets stood at $359.4 billion. This represented a growth rate of 3.4% for the June quarter, or 13.1% during the 1997-98 financial year.

This is one of the key statistics of the latest edition of APRA's Insurance and Superannuation Bulletin released today by the Chief Executive Officer, Graeme Thompson.

APRAs quarterly Bulletin is designed, among other things, to provide a timely and comprehensive snapshot of the size and structure of the superannuation, life and insurance sectors.

Other statistics in the June quarter Bulletin show that:

Contributions rose by 18.5% during the June quarter or 18% for the 12 months ended 30 June this year, increasing from $28 billion to $33 billion.
Leaving aside excluded funds, which themselves grew rapidly, contribution growth for big funds was 19% per annum.
Strongest growth came from member contributions. They increased by 31% over the previous year to $12.9 billion.
Net contributions (ie. contributions less benefits) totalling $11.8 billion - a rise of $1.7 billion or 16.8% - flowed into superannuation during the 1997-98 financial year.

According to the Bulletin, self-managed or DIY funds were the fastest growing market segment increasing by 23% during the year ended 30 June. In the same period industry funds grew by 22%, retail funds 21% and public sector funds 13%.

Reflecting continuing strong levels of consolidation and rationalisation in how companies are managing their superannuation, corporate fund assets grew by only 9% during the year.

Remaining at their usual levels, inward transfers accounted for 37% of all money deposited into superannuation during the June quarter.

In the first six months of 1998 there were 15,100 new excluded funds registered, down slightly (at 3%) on the first six months of 1997. There are now 185,800 superannuation funds (of which around 181,700 or nearly 98% are excluded). The excluded fund market segment share represents 12% of all superannuation assets.

The accompanying attachment lists the articles contained in the Bulletin. In particular, this edition of the Bulletin contains a statement from APRA's CEO briefly outlining APRA's role and its approach to

regulating the insurance and superannuation industries and articles looking at current trends in the insurance industries.

The main superannuation article in the Bulletin updates previous APRA analysis on fund administration costs. A major finding from this analysis is that the average administration cost for large accumulation funds (which represent around 75% of all member accounts) is $1.35 per member per week.

Other superannuation articles provide an in depth profile of the excluded, or small self-managed fund, market and a review of the Retirement Savings Account (or RSA) market.

Other attachments to this statement include the Superannuation survey highlights - June 1998 which provides additional information on the manner of investment and asset allocation of superannuation; while Superannuation industry at a glance provides a snapshot of the current structure of the superannuation industry.

Further information :

Tony Nichols
Insurance & Superannuation Research Unit
APRA
02 6213 5378