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Flow into SMSFs proves enduring appeal

Superannuation funds continue to leak from Australian Prudential Regulation Authority-regulated funds into SMSFs in gross and net terms, demonstrating no loss of appeal, according to industry body SPAA.

Using the latest figures from the ATO, SPAA director of technical and professional standards Graeme Colley said that over the five years to 30 June 2013, $75.6 billion was rolled into SMSFs and only $19.9 billion was rolled out of SMSFs.

“On average, and on an annual basis, $15.1 billion rolled into SMSFs and $4 billion rolled out of SMSFs,” Colley said today.

“These numbers hardly suggest an SMSF sector in decline or even treading water.

“Indeed, what they comprehensively show is that SMSFs retain their strong appeal.”

While the data did not distinguish between amounts rolled between SMSFs and the amounts rolled to or from non-SMSFs, the net reported result was an inward rollover amount of $55.7 billion over the five years, he said.

“Most amounts rolled in, 65 per cent, or rolled out, 60 per cent, involved SMSFs with assets of between $500,000 and $5 million,” he said.

The ATO figures also highlighted the importance of the benefit payments trend from SMSFs, confirming their role in providing retirement incomes and meeting the government policy objective of super providing income streams for Australians, he said.

“In the 2009 financial year, income streams amounted to 75.7 per cent of all benefit payments from SMSFs, of which transition-to-retirement income streams (TRIS) amounted to 9.1 per cent of total payments,” he said.

“By the 2013 financial year, the proportion of income streams paid from SMSFs had increased to 93.2 per cent, of which 11.4 per cent were TRIS and just 6.8 per cent were lump sums, compared with 13.8 per cent of lump sums in the 2009 financial year.”

He added the 2013 financial year showed a deficit in the payment of benefits over all contributions made to SMSFs of just over $2.23 billion.

“This was the first year in which employer, member and other contributions combined were less than the amount of benefit payments,” he said.

“However, when net rollovers are added to contributions there remains an increase in net inflows to funds from both contributions and net rollovers of just over $10 billion.”

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