Growth of SMSF assets
In the five years to 2017, SMSF assets grew by $274.3 billion or 65%. In value terms, SMSFs continue to have a significant influence in the overall growth of the $2.3 trillion Australian superannuation industry.3
Graph 1 shows the growth in superannuation assets in the five years to 2017 by fund type4. Total superannuation assets in the period grew by 68% or $942 billion, of which SMSFs contributed 29% in the proportion of overall growth.
Graph 1: Growth of superannuation assets by fund type 2012–17
Growth in numbers of SMSFs
In the five years to 2017, the number of SMSFs grew from 473,000 to 597,000. This represents a growth of 26% over the five-year period.
Graph 2 shows an average of almost 5% growth annually in SMSF numbers over the five years. A peak of 6% growth occurred in 2013, but dropped to approximately 4% for the years 2014 to 2016, before rising to 5% in 2017 (see appendix 1, table 1).
Graph 2: Annual growth in the number of SMSFs from 2013–17
Over this period, establishment of new funds averaged 34,000 a year (or approximately 2,800 a month). There was a decline from 40,000 establishments in 2013 to 30,000 in 2017 (25%). The number of SMSF wind-ups averaged approximately 9,500 a year.5
The largest proportion of SMSFs have been established for more than 10 years (53%), while 16% 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 2016, 90% are still in existence. On average, 2.2% of SMSFs wind up in their first year of establishment. The lowest proportion of wind-ups tended to occur for funds in their second year of operation, and the rate increased marginally in the subsequent years of operation.6>
Contributions to SMSFs
Over the five-year period to 30 June 2016, contributions to SMSFs averaged $28.1 billion a year (member $21.4 billion and employer $6.6 billion) (see appendix 1, table 3) on behalf of 61% of SMSF members.7
In 2016, member contributions into SMSFs were $25.1 billion, increasing in value by 31% over five years but a slight decrease from $25.3 billion in 2015. Member contributions represented 78% of all SMSF contributions, increasing from 72% in 2012 as a result of stable employer contributions.
For 2016, the median member contribution of $25,000 was higher than the median employer contribution of $19,000. This was the fourth 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.
In 2016, members 55 years and older made 83% of member contributions to SMSFs, a slight increase from 82% in 2012 and 56% of employer contributions, down from 60% in 2012.
Over the five years to 2016, there was little change in the age distribution of members making member contributions, with members between 60 and 64 years consistently contributing the largest proportion of member contributions of around 32% each year. The largest proportionate increase over the period was in members between 70 and 74 years (1%) and the largest proportionate decrease in members between 50 and 54 years (2%).
Though members between 55 and 59 years generally contributed the largest proportion of employer contributions over the five years to 2016 (20%), there was a shift to younger members receiving a higher proportion of employer contributions. The largest proportionate increases over the period were almost 3% each for members 35 to 44 years and 45 to 49 years and the largest proportionate decrease was in members between 60 and 64 years (3%).
For information on contributions by member age, also see supplementary table 3, XLXS file.
Total contributions to SMSFs over the five years increased by 21%, approximately 6% higher than the growth of total contributions to all superannuation funds (16%) made over the same period.8
Member contributions to SMSFs increased by 31% over this period, while employer contributions decreased by 5%. By comparison, both member and employer contributions to all super funds increased by approximately 14% and 17% respectively.
Graph 3 compares contributions to SMSFs as a proportion of all super fund contributions for the years ended 30 June 2012 to 30 June 2016.
At 30 June 2016, contributions to SMSFs represented 24% of all super fund contributions. Member contributions into SMSFs, accounted for 53% of all member contributions across all super funds in 2016, an increase of 7% 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 2016.
Graph 3: Contributions to SMSFs as a percentage of total Australian super contributions (for member, employer, and total) 2012–16
The percentages are calculated as: SMSF (member/employer /total) contributions divided by total contributions (member/employer/total).
Over the five years to 30 June 2016, $78.6 billion was rolled into SMSFs and $24.5 billion was rolled out of SMSFs (see appendix 1, table 4).
On average, funds reported $15.7 billion rolled into SMSFs and $4.9 billion rolled out of SMSFs annually. In 2016, funds reported $15.3 billion rolled into SMSFs and $5.6 billion rolled of SMSFs, both amounts decreasing by less than 1% from 2015.
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 $54.1 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 greater than $2 million to $5 million in assets had the most growth in the proportion of inward rollover amounts (2%) over the period, while funds with $200,000 to $500,000 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 greater than $1 million to $5 million in assets showed the most growth in the proportion of outward rollover amounts over the five year period (7%).
SMSF benefit payments
Over the five years to 30 June 2016, benefit payments from SMSFs averaged $29.8 billion a year (see appendix 1, table 5). Benefit payments increased each year from $22.6 billion in 2012 to $37.0 billion in 2016 while the proportion of SMSF members receiving benefit payments increased by 16% over this period.9
The average benefit payments per fund and median benefit payment increased over the period, by 26% and 21% respectively. This growth occurred in the four years to 2015, with 2016 showing little change from the prior year. The average benefit payment was $127,000, and median payment to $63,000.
In 2016, 94% of all benefit payments were in the form of an income stream (including transition to retirement income streams), an increase from 82% in 2012. 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.10>
In 2016, transition-to-retirement income streams made up 11% of benefit payments, the proportion remaining steady over the five year period. Similarly, there was little change in SMSF members receiving transition-to-retirement income streams as a proportion of all SMSF members receiving benefit payments over the period, 18% in 2016.
In 2016, the main type of income stream benefit payment was for members 60 years and older, with 77% of all members receiving income streams and 84% 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 2016, by 6% and 5% respectively, while all other benefit types remained consistent or had a small decrease over the same period.
Similarly most lump sum payments were for members 60 years or older, with 64% of the value of lump sums paid to 55% of members with a lump sum benefit in 2016. Over the four years to 2016 there was an increase in the proportion of members receiving lump sums in relation to release authority payments (by 21%); however the value of these benefits only increased by 1% as a proportion of total lump sum payments over the same period.
Over the four years, the proportion of members receiving other types of lump sum benefits all decreased. The most significant decline for members 60 years old and over (14%) followed by members less than 60 years old (5%).
The average benefit payment per member increased each year, to $76,000 in 2016 compared to $66,000 in 2012. 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 2016, members 75 years and older reported the highest average benefit payment of $96,000. This is consistent with payments from 2012.
Over the five-year period, there was a shift in the age distribution of members receiving benefit payments. The majority of members receiving benefit payments were 60–69 years old, with the proportion decreasing over the period from 61% in 2012 to 54% in 2016. Conversely, there was an increase in the proportion of members 70 years and over receiving benefit payments, from 26% in 2012 to 36% in 2016.
For information on income stream benefit payments and lump sum payments specifically, see appendix 1 supplementary tables 5.1 and 5.2, Appendix 1 Data tables (XLXS 104KB)This link will download a file.
SMSF net flows
During the five years to 30 June 2016, overall net flow into SMSFs was $17.7 billion.
Graph 4 shows that from 2012 to 2016, there was a 122% reduction in net flows into SMSFs, from $13.4 billion net inflow to $2.9 billion net outflow. This is largely attributed to the large increases in benefit payments from 2014 to 2016, as well as additional deductible and non-deductible expense items in the calculation of net fund flows from 2013 (see Appendix 3 – Glossary).11
The net fund flow equals total contributions plus net transfers (inward minus outward rollovers) minus benefit payments and total expenses.
3 APRA 2017, June 2016 Annual Superannuation Bulletin, 1 February 2017, excel version Table 8a, and APRA 2017, June 2017 Quarterly Superannuation Performance, 22 August 2017 page 8.
4 The ‘other’ fund type includes ‘exempt schemes’ as per reporting method used by APRA in their Quarterly Superannuation Bulletins.
5 Average wind-up figures include understated figures for the year ended 30 June 2017 due to the time lag between when wind ups occur and when the ATO receives notification from the SMSF.
6 Based on SMSF income tax and annual regulatory return lodged data over 10 years.
7 Based on 2012–2016 SAR lodged data.
8 APRA 2017, June 2016 Annual Superannuation Bulletin, 1 February 2017, excel version Table 4a.
9 Based on 2012–2016 SAR lodged data.
10 For further information on label changes, refer to the SMSF annual return instructions available on the ATO website.
11 ATO 2017, Self-managed super fund statistical report, June 2017.