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Average balances reach new milestone

The latest ATO industry data has shown the average SMSF asset balance has reached a record high and the sector has generated another year of positive returns.

The statistics were released in the regulator’s annual documents “Self-Managed Superannuation Funds: A Statistical Overview 2013-14” and the “Self-Managed Superannuation Funds Statistical Report” for September.

“For the first time the average assets of SMSFs grew to over $1 million in 2014, a growth of 23 per cent over five years,” ATO assistant commissioner Kasey Macfarlane said.

“In 2013-14, SMSFs also experienced a positive return on assets of 9.8 per cent, the fifth consecutive year of positive returns.”

Along with average balances the study showed the number of funds and fund members also rose.

“In the five years to 2014-15 we have seen the number of SMSFs grow by 27 per cent to 557,000 with total assets worth $590 billion,” Macfarlane revealed.

“SMSFs account for 99.5 per cent of all superannuation funds and 29 per cent of the $2 trillion in total superannuation assets in Australia.”

The use of borrowings within SMSFs was another area where the statistics reflected an increase.

However the recorded rise in these numbers were in part due to a change in the methodology used to document these strategies.

SMSF borrowing climbed from 2.3 per cent of funds in 2010 to 6.7 per cent of funds in 2014.

At June 2014, SMSF borrowings were equivalent to 2.3 per cent of total SMSF assets as compared to 1.9 per cent at June 2013, according to the statistics.

Macfarlane said limited recourse borrowing arrangements (LRBA) represented a portion of these total borrowings but that the value of assets held by SMSFs under LRBAs as a proportion of total SMSF assets remained relatively low in 2013-14 at approximately 2.7 per cent.

The ATO analysis of SMSF annual return data shows LRBA real property assets, both residential and non-residential, make up the majority of the total value of assets required under these arrangements.

As at the September 2015 quarter, SMSF assets held under LRBAs were estimated at approximately $18 billion, representing approximately 3 per cent of total SMSF assets of $576 billion.

Macfarlane also highlighted the growing number of funds moving into pension phase where an 8 per cent increase in the number of SMSFs shifting into full pension phase had been witnessed by the ATO over the past five years.

“This shift is reflected by the growth of 32 per cent in SMSF members receiving benefits payments from their fund over the same five year period,” she said.

“The 2013-14 financial year also saw a rise in total benefit payments to over $30 billion.”

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