In the five years to 2016, SMSF assets grew by $219.7 billion or 55%. In value terms, SMSFs continue to have a significant influence in the overall growth of the $2.1 trillion Australian superannuation industry.
Graph 1 shows the proportion of total superannuation asset growth by fund type. Total superannuation assets in the period grew by 59% or $780 billion, of which SMSFs contributed 28% in the proportion of overall growth.
Graph 1: Proportion of five-year total superannuation asset growth by fund type
Growth in numbers of SMSFs
In the five years to 2016, the number of SMSFs grew from 440,000 to 577,000 (see table 1). This represents a growth of 31% over the five-year period.
Graph 2 shows an average of almost 6% growth annually in SMSF numbers over the five years. A peak of almost 8% occurred in 2012, and after a trough to below 5% in 2014 and 2015 growth in SMSF numbers returned to the five-year average of almost 6% in 2016.
Graph 2: Annual growth in the number of SMSFs from 2012 to 2016
Over this period, establishment of new funds averaged 36,000 a year (or approximately 3,000 a month). Despite the continued establishment of new funds there was a decline over the period from 41,000 establishments in 2012 to 31,000 in 2016 (−24%). The number of SMSF wind-ups averaged approximately 8,600 a year.
The largest proportion of SMSFs have been established for more than 10 years (45%), while 17% have been established for three years or less The median fund has been established for nine years (see Appendix 1, table 2).
Of SMSFs established in the last 10 years to 2015, 90% are still in existence. While, on average, 1.7% of SMSFs wind up in their first year of establishment, the least proportion of wind-ups occur for funds in their second year of operation, and the rate increases marginally in the subsequent years of operation.
Contributions to SMSFs
Over the five-year period to 30 June 2015, contributions to SMSFs averaged $26.6 billion a year (member $20.0 billion and employer $6.6 billion) on behalf of 62% of SMSF members (see Appendix 1, table 3).
In 2015, member contributions into SMSFs made up 79% of all SMSF contributions, an increase of 8% from 2011. While in 2011 the ratio of member and employer contributions to SMSFs was at approximately five to two, since 2013 it has been higher, at approximately four to one in 2015.
For 2015, the median member contribution of $26,000 was higher than, the median employer contribution of $19,000. This was the third consecutive year of higher median member contributions into SMSFs compared to median employer contributions.
Over the five years, most member contributions were to SMSFs with assets between $500,000 and $5 million. Employer contributions were mostly spread across SMSFs with assets between $200,000 and $2 million.
Total contributions to SMSFs over the five years increased by 38%, which is 6% higher than the growth of total contributions to all superannuation funds (32%) over the same period.
Member contributions to SMSFs increased by 54% over this period, while employer contributions decreased by 0.5%. By comparison, both member and employer contributions to all super funds increased by approximately 48% and 24% respectively.
In 2015 84% of member contributions were made by members 55 years and older, up from 81% in 2011. The largest increase was in members between 65 and 69 (4%) and the largest decrease was in members between 50 and 54 (-2%). Overall members between 60 and 64 contributed the largest proportion of member’s contributions (33%) in 2015, which has been the consistent trend in the five years up to 2015.
Members 55 years and older made 55% of employer contributions in 2015, down from 59% in 2011. The largest increase was in members between 35 and 44 (3%) and the largest decrease was in members between 60 and 64 (−3%). Overall members between 55 and 59 contributed the largest proportion of employer contributions (20%) in 2015, a shift from 2014 where members between 60 and 64 were the highest contributors, but consistent with the trend between 2011 and 2013.
Graph 3 compares contributions to SMSFs as a proportion of all super fund contributions for the years ended 30 June 2011 to 30 June 2015.
At 30 June 2015, contributions to SMSFs represented 24% of all super fund contributions. Member contributions into SMSFs, accounted for 51% of all member contributions across all super funds in 2015, an increase of 2% over the five-year period. In contrast, the proportion of employer contributions to SMSFs has dropped over the period to only 8% of all employer contributions across all super funds in 2015.
Graph 3: Contributions to SMSFs as a percentage of total Australian super contributions (for member, employer, and total) 2011–2015
The percentages are calculated as: SMSF (member/employer /total) contributions divided by total contributions (member/employer/total)
SMSF rollovers
Over the five years to 30 June 2015, $79.2 billion was rolled into SMSFs and $23.1 billion was rolled out of SMSFs (see Appendix 1, table 4).
On average, funds reported $15.8 billion rolled into SMSFs and $4.6 billion rolled out of SMSFs annually.
Our data does not distinguish between amounts rolled between SMSFs and amounts rolled to or from non-SMSFs. However, the net reported result is an inward rollover amount of $56.1 billion over the five years.
Over the period, most inward rollovers (67%) involved SMSFs with assets of greater than $200,000 to $2 million. Funds with $200,000 to $500,000 in assets had the most growth in the proportion of inward rollover amounts (2%) over the period, while funds with $100,000 to $200,000 and greater than $10 million in assets had growth of 1%.
The majority of amounts rolled out (56%) involved SMSFs with assets of greater than $500,000 to $5 million. SMSFs with $200,000 to $500,000 and over $10 million in assets had the most growth in the proportion of outward rollover amounts over the five-year period, of 2% and 1% respectively.
SMSF benefit payments
Over the five years to 30 June 2015, benefit payments from SMSFs averaged $26.5 billion a year (see Appendix 1, table 5). Benefit payments have increased each year from $19.2 billion in 2011 to $35.0 billion in 2015. SMSF members receiving benefit payments also increased by 24%.
The average benefit payments per fund and median benefit payment increased over the period by 34% and 32% respectively. In 2015, the average benefit payment per fund increased to $126,000, and median payment to $62,900.
In 2015, 94% of all benefit payments were in the form of an income stream (including transition to retirement income streams), an increase from 79% in 2010. This increase was largely due to a rise of 11% in 2013 income stream benefit payments, mainly as a result of improved data collection on the SAR. From 2013 label changes were made to better capture lump sum and income stream benefit payments for members that may have previously reported a combination of such benefit payments.
Transition-to-retirement income streams have remained steady from 11% of all benefit payments in 2011 to 12% in 2015. Similarly, SMSF members in receipt of transition-to-retirement income streams have remained steady from 18% of those receiving benefit payments in 2011, to 19% in 2015.
In 2015, the main type of income stream benefit payment was for members 60 years and older, with 75% of all members receiving income streams and 83% of the total value of income stream benefits paid. There was an increase in the proportion of members and the value of this income stream benefit type paid from 2013 to 2015, by 4% and 3% respectively, while all other benefit types remained consistent or had a small decreased over the same period.
Similarly most lump sum payments were for members 60 years or older, with 67% of lump sums paid to 60% of members with a lump sum benefit in 2015. Over the three years to 2015 there was an increase in the proportion of members receiving lump sums in relation to release authority payments (by 16%); however the value of these benefits decreased by 1% as a proportion of total lump sum payments over the same period.
The proportion of members receiving other types of lump sum benefits all decreased, with the most significant decline for members 60 years and over (by 10%).
The average benefit payment per member increased each year, to $77,000 in 2015 compared to $62,000 in 2011. However, benefit payments as a proportion of the average member balance remained steady over the same period, at approximately 8% of the average member balance (see Appendix 1, table 5).
In 2015, members aged under 55 years reported the lowest average benefit payments of $29,000, a shift from members in the 55–59 age range in 2011 to 2013.
The highest average benefit payment also shifted from members aged 65–69 years in 2011, to those 75 years and over from 2013, increasing in value to $92,000 in 2015.
The majority of members receiving benefit payments were aged 60-69, with the proportion decreasing over the period from 62% in 2011 to 56% in 2015. Conversely, there was an increase in the proportion of members aged 70 years and over receiving benefit payments, from 24% in 2011 to 33% in 2015.
Over the five-year period, there was a shift in the age demographic of members receiving benefit payments, with a decrease in the proportion of members 64 years and under corresponding with an increase to those 65 years and over (by 11%).
For information on income stream benefit payments and lump sum payments specifically, see supplementary tables 5.1 and 5.2, XLS file(see Appendix 1).
SMSF net flows
During the five years to 30 June 2015, overall net flow into SMSFs was $34.7 billion.
Graph 4 shows that from 2011 to 2015, there was an 89% reduction in net inflows into SMSFs, from $13.6 billion to $1.4 billion. This is largely attributed to the large increases in benefit payments in 2014 and 2015, to $30 billion and $35 billion respectively, as well as additional deductible and non-deductible expense items in the calculation of net fund flows from 2013 (see Appendix 3).
Graph 4: Breakdown of SMSF fund flows 2011–2015
The net fund flow equals total contributions plus net transfers (inward minus outward rollovers) minus benefit payments and total expenses.
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