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SMSF sector nears new milestone

SMSF sector growth

The SMSF sector grew to almost 600,000 funds over the June quarter, with 35 to 44 year olds continuing to represent the demographic with the largest proportion of newly established funds, according to latest ATO statistics.

The ATO statistical report for the June quarter shows growth in the SMSF sector has pushed the number of funds to almost 600,000, with a younger demographic still responsible for the largest proportion of new funds despite a slight dip compared to the previous quarter.

The SMSF regulator’s “Self-managed super fund quarterly statistical report – June 2019” revealed the number of funds increased to 599,678 during the June quarter from 598,429 in March.

The total estimated assets of SMSFs also increased to $748 billion compared to $747 billion in the previous quarter.

According to the report, 31.9 per cent of the funds established in the June quarter were set up by individuals aged between 35 and 44, compared to 33.1 per cent in the March quarter.

By contrast, the proportion of 60 to 69 year olds establishing a new SMSF in the June quarter rose to 9.2 per cent from 7.5 per cent in March.

The proportion of newly established funds in the $40,000 to $80,000 income range fell to 27.5 per cent from 29.6 per cent in the March quarter, while the proportion of newly established SMSFs in the $100,000 to $150,000 income range rose to 16.8 per cent in the June quarter, compared to 16.2 per cent in March.

The latest statistics also showed the total number of SMSF wind-ups for 2018/19 fell to 2120 as at June 30, a substantial drop from the 22,730 SMSFs wound up in 2017/18, however, the ATO indicated this number was likely to increase as more notifications were received for the end of the financial year.

In addition to the latest quarterly statistics, the report also provided an update of the ATO’s annual SMSF population analysis tables for 2014 to 2018 based on SMSF annual return data.

The tables revealed a 66 per cent drop in the level of member contributions from $33.867 billion in 2016/17 to $11.622 billion in 2017/18, and a 15 per cent decrease in benefit payments made by SMSFs to $37.686 billion in 2017/18 from $44.290 million in 2016/17.

“We attribute this decline to a normalisation of flows after a spike in the 2016/17 year,” the ATO said.

“Some SMSFs restructured in recent years to prepare for the superannuation measures that came into effect 1 July 2017, in particular the introduction of the $1.6 million total super balance and transfer balance cap.”

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