Some major superannuation funds may have admitted to fee gouging during the banking royal commission, but the sector’s total assets still managed to grow almost eight per cent in the June quarter – compared with the same period last year – to $2.7 trillion.
However, total benefits paid out to retirees in the June quarter slumped 4.7 per cent to $70.4 billion, compared with June 2017.
There are approximately 3.6 million retired Australians, and if half of them have super accounts, on average they would have collected about $9700 a month each during the June quarter.
In the last three months of the financial year, most of the fat was put on by industry funds, which for the first time in a year are bigger than bank-owned retail funds. The not-for-profit funds grew to $631.6 billion, leaving their retail rivals behind on $622.3 billion.
Interestingly, it was the for-profit, bank-owned funds which had the most dirty linen aired at the royal commission, with admissions by most that they had put bonuses for financial advisers ahead of their customers’ interests.
During the past quarter, funds under the watch of the Australian Prudential Regulation Authority (APRA) grew their assets by more than 9 per cent to $1.76 trillion.
The largest growth spurt was recorded by the standardised balanced MySuper product, which shot up by 13.6 per cent to $675.6 billion.
Self-managed super funds (SMSF) also increased the value of their assets – to $750 million (6.4 per cent) – making it the wealthiest category. SMSFs continued to grow in numbers, totalling just shy of 600,000, compared with 582,000 at the same time last year.
Compared with the March quarter, the latest statistics reveal that funds grew a strong 3.6 per cent in the months leading up to the end of the financial year.
However, contributions by employers and members fell 6.5 per cent in the last quarter to $109.4 billion, compared with $117 billion in June 2017.
The average rate of return to the end of June across all funds with more than four members was 7.6 per cent. This is about one percentage point less than at the same time last year and compares with the five-year average of 7.9 per cent.
At the end of June, APRA-regulated funds had more than 50 per cent of their total $1.7 trillion invested in listed shares. International equities soaked up 24.1 per cent, Australian shares accounted for 23.4 per cent, and 3.8 per cent was invested in unlisted equities.
Just over 21 per cent was invested in fixed income and 10.3 per cent in cash. Property and infrastructure made up 13.5 per cent and 3.7 per cent was parked in other investments, such as hedge funds.
Did you notice good growth in your super fund? Do you monitor your fund’s returns against rivals?