• # Self-managed super fund quarterly statistics methodology

A summary of the methodology ATO uses to produce quarterly statistics for self-managed super funds (SMSFs).

## Overview

We use an estimation model when producing quarterly statistics for self-managed super funds (SMSFs). The model applies averages for various self-managed super fund (SMSF) quantities to the entire population of active SMSFs, to arrive at estimated totals.

Both the Australian Prudential Regulation Authority (APRA) and the Australian Bureau of Statistics (ABS) agree with the model methodology. However, in using or presenting this data it is important to stress that it is a statistical estimate.

## Data sources

The primary source of data we use is the SMSF annual return. The key limitations associated with these returns are their frequency (annual) and their currency – the returns are due some months after the end of the financial year.

### Number of SMSFs

A significant figure for estimating SMSFs statistics is the number of funds. This is obtained from the formula:

• number of funds = [(number of SMSFs established with us) − (number of SMSFs that have notified us they have wound up)].

This figure will be subject to historical revisions due to late notice of both establishments and wind-ups. A potential concern is SMSFs winding up and failing to notify us. As it is compulsory for funds to lodge annual returns, this will be minimal.

#### Newly established funds

The characteristics of SMSFs in their first year of establishment ('new funds') and older funds ('continuing funds') are significantly different. This is especially with regard to 'flows' into and out of the fund, such as contributions, transfers and benefits. We treat the two categories separately, and then combine them, in the production of estimates.

#### Assets and liabilities

Total assets or total liabilities for the June quarter each year is estimated by referring to return data for that year, when sufficient data becomes available, using the formula:

• total assets = [(number of new funds × average value for new funds) + (number of continuing funds × average value for continuing funds)].

The calculation for total assets for other quarters must take into account growth over the period as well as monies flowing into and out of SMSFs. For example, total assets for non-June quarters are obtained by estimating the changes for each asset type from the most recent June quarter, using the formula:

• assets = [(previous quarter assets) + (previous quarter assets × investment return for each asset type) + (apportionment of 'flows' see Note 1 below)].

Estimated investment return for each asset type is based on indices and are detailed in Appendix A.

#### Liabilities

Total liabilities for each June quarter are estimated by referring to return data for that year, when sufficient data becomes available, using the same formula as used for Total assets.

Liabilities by type (for example, borrowings or other liabilities) for each quarter are calculated by applying the proportion of the liability to total liabilities from the previous June quarter, using the formula:

• liability (e.g. borrowings or other liabilities) = [(total liabilities) × (liability as a proportion (%) of total liabilities)].

For example, if in the 2017–18 return data, 'Borrowings' equate to 3.1% of total liabilities, this proportion is applied to total liabilities to estimate 'Borrowings' for June 2018 and subsequent quarters. When sufficient 2018–19 return data becomes available the proportions for June 2019 and subsequent quarters will be updated.

#### Net assets

Net assets for each quarter are estimated using the formula:

• net assets = [(total assets) − (borrowings) − (other liabilities)].

#### Contributions, benefits, transfers and expenses

Monies flowing into or out of an SMSF increase or decrease the value of assets held in that SMSF. The values of contributions (member and employer), transfers (inward and outward), benefit payments, and total expenses (investment and administration and operating expenses) are calculated using the formula above (where total assets represent the quantity being estimated).

Total net flows are then calculated as:

• net flows = [(member contributions) + (employer contributions) + (inward transfers) − (outward transfers) − (benefit payments) − (total expenses)].

This total is essentially divided by four to provide an estimated quarterly figure. Adjustments are made to account for new funds entering the system, as well as funds that wind up, with ‘net flows’ then apportioned appropriately across the different types of assets and liabilities.

#### Members

Similarly, for the estimated number of members, separate averages are calculated for new and continuing funds from the return data, using the formula below:

• number of members = [(number of new funds × Average members of new funds) + (number of continuing funds × average members of continuing funds)].

## Appendix A

Sources for the indices used to simulate asset growth between June quarters:

Appendix A

Label

Source of index

Insurance policy

Growth in all assets invested in life insurance.

APRA's quarterly life insurance performance statisticsExternal Link Table 2a – Total assets.

Other managed investments

Growth in superannuation assets invested in managed funds.

ABS Cat No. 5655.0 (Managed funds)Table 9 (Investment managers), column F (Managed funds – Superannuation funds).

Non-residential real property; residential real property; limited recourse borrowing arrangements

CoreLogic Hedonic Home Value IndicesExternal Link

Index results at end of each quarter, Quarterly change in dwelling values (National).

Plus, an estimate of rental income (see below).

Estimate for average rental income based on weekly rent of 0.1% of the value of the property. This is multiplied by 13 to achieve a quarterly estimate – e.g. a factor of 1.3%.

Listed shares; unlisted shares; overseas assets

ASX funds statistics: ASX Investment Products Monthly UpdateExternal Link, S&P/ASX 200 Total Returns index (XJOA).

Listed trusts and unlisted trusts

Growth in superannuation assets invested in trusts.

Assets in trusts are treated as though half were invested in equities and half in property. Index is:

[(equities + real property + other property + rent) ÷ 2].

Cash and term deposits; debt securities

Return on one year fixed term deposits ÷ 4.

RBA table F4 (Retail deposit and investment rates)External Link column N (Banks' term deposits (\$10,000) – one year).

Note: The value used is the one from one year before, to measure the return on an investment of cash made one year ago.

Loans; Collectables and personal use assets; Other assets

ABS Cat. No. 6401.0 – Consumer price index Table 1, column J (Index numbers; All groups; Australia).