The Australian Prudential Regulation Authority (APRA) today released its Annual Superannuation Bulletin for the financial year to 30 June 2011. Total superannuation assets increased during the year by $137.4 billion, or 11.5 per cent, to $1.34 trillion.
During this period, public sector funds’ assets increased by 21.9 per cent. Small funds, which include self-managed super funds (SMSFs), single-member approved deposit funds and small APRA funds, increased by 11.5 per cent, industry funds by 10.8 per cent, retail funds by 8.9 per cent and corporate funds by 3.7 per cent.
In the year to 30 June 2011, the average rate of return (ROR) for large funds (more than four members) was 7.8 per cent. Industry funds recorded an ROR of 9.0 per cent, public sector funds 8.9 per cent, corporate funds 7.7 per cent and retail funds 6.5 per cent.
In the 10 years to 30 June 2011, the average ROR for large funds was 3.8 per cent per annum. Public sector funds recorded an ROR of 4.7 per cent per annum, industry funds 4.5 per cent per annum, corporate funds 4.3 per cent per annum and retail funds 2.9 per cent per annum.
For the year to 30 June 2011, contributions to all superannuation entities totalled $104.8 billion, with employers contributing $71.4 billion and members contributing $32.5 billion. Contributions to large funds totalled $81.2 billion, of which retail funds received 33.3 per cent ($27.1 billion), industry funds 32.5 per cent ($26.4 billion), public sector funds 29.4 per cent ($23.9 billion) and corporate funds 4.8 per cent ($3.9 billion).
For large funds, total accumulation retirement benefits are estimated to be 82.2 per cent of their total assets, or $731.3 billion, at 30 June 2011, with 17.8 per cent or $158.2 billion in defined benefits.
The Bulletin also includes features on the volatility of superannuation returns and on superannuation fund reserves (unallocated benefits). The feature ‘Volatility of superannuation returns’ examines the long-term ROR and volatility of RORs for superannuation funds over the 15 years to 30 June 2011. The analysis found that the five-year average ROR for 2007-2011 was lower than the two preceding five-year periods. It also found that the volatility of RORs for 2007-2011 was higher than the two preceding five-year periods. Increased volatility of superannuation RORs leads to greater uncertainty around members’ final retirement outcomes. Over the 15 years to June 2011, the average industry-wide ROR was 5.2 per cent per annum.
The second Bulletin feature ‘Superannuation fund reserves’ examines the size and use of fund reserves. The analysis found that around half of superannuation funds held no reserves (unallocated benefits) within the fund at 30 June 2011. Some funds may rely on access to financial support outside the fund, including support from the employer sponsor or the trustee, which may affect the use and size of reserves held by the fund.
The Annual Superannuation Bulletin is available.