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Major drop in voluntary contributions reported

The first quarter of 2015 has revealed a significant drop in the average contribution inflow per fund, according to the latest analysis from Multiport.

The Multiport “SMSF Investments Patterns Survey” found that during the March quarter, the average voluntary contribution was $6120, compared to $13,715 during the December quarter 2014.

The March quarter was historically the lowest quarter in the financial year for SMSF contributions, but was proportionally lower compared to previous years, with March 2014 recording a contribution average of $7587 and March 2013 recording $6805.

Given changes to superannuation guarantee rates and increased contribution caps, a higher average contribution level would have been expected for the current year compared to prior years, the survey said.

The lower average contribution level could indicate caution in response to possible changes to superannuation in the 2015 budget.

“We’ve also seen the average pension payment made by SMSFs decrease significantly for the quarter, dropping from $21, 105 in December 2014 to $11,588 in March 2015, however, this is largely in line with the March quarter from previous years,” AMP SMSF administration head of technical services Philip La Greca said.

Part of the higher level of benefit payments during the December quarter was likely a result of a number of clients restriking their pension accounts prior to 31 December due to the Centrelink assessment changes and drawing their pro-rated minimum pension amounts, the survey said.

The March quarter results also showed a significant increase in managed funds and a decrease in longer maturity term deposits due to low interest rates offered on longer maturity term deposits.

Furthermore, exposure to international equities increased from 12.5 per cent to 14.4 per cent of fund assets.

When taking into consideration the increase in performance in the sector for the quarter, the allocation in percentage terms should have increased to 12.9 per cent if trustees left their initial allocation unchanged, the survey said.

This demonstrated trustees’ increased exposure to the sector, with new inflow of funds mainly coming from the Australian equity sector.

Allocations to Australian equities decreased to 38.6 per cent in the March quarter from 41.6 per cent the previous quarter.

The quarterly analysis surveyed around 2250 funds, taken from a sample of Multiport-administered SMSFs at 31 March 2015.

The assets of the funds surveyed represented just under $2.6 billion.

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