Industry funds continue to top the growth stakes

Industry superannuation funds continue to lead superannuation growth, according to the latest data released by the Australian Prudential Regulation Authority (APRA).

The June quarter data, released in mid-October, revealed that industry fund assets increased by 8.2 per cent for the quarter compared to 5.4 per cent for retail funds, 4.6 per cent for public sector funds and 0.3 per cent for corporate funds.

In fact, the data paints a continuing grim picture for corporate funds. While corporate funds ended in negative territory “primarily due to large outward rollovers from the sector”, industry, public sector and retail funds all recorded positive net contributions, with contributions totalling $122.9 billion in the June quarter.

Total estimated superannuation assets in Australia increased by 4.5 per cent for the quarter to $741.7 billion, representing a 17.6 per cent increase over the same period last year.

As is normally the case, retail funds held the largest proportion of superannuation assets, accounting for 33.4 per cent of total assets, however the importance of self-managed superannuation funds was underscored by the fact that they accounted for 22.3 per cent of total assets.

This compared with the public sector fund’s 17.3 per cent, the industry fund’s 15.2 per cent, and the corporate fund’s 8 per cent of total assets.

While industry funds may represent the fastest growing sector of the superannuation industry, retail funds continue to dominate in terms of funds under management and the value of inflows.

The APRA data showed that of the $17.3 billion in contributions recorded in the June quarter, $7.8 billion flowed to retail funds, $4.4 billion to public sector funds, $4 billion to industry funds and $1 billion to corporate funds.

The data also indicated that the superannuation co-contribution regime is beginning to have a strong positive impact. Employer contributions represented 69.4 per cent of contributions during the quarter, member contributions represented 28.7 per cent, and other contributions including co-contributions and spouse contributions accounted for 1.9 per cent.

Looking at financial performance and assets, the APRA data said that the return on assets during the quarter was 3 percent, compared with 1.2 per cent the previous quarter.

It found that public sector funds generated a return on assets of 3.4 per cent, compared to 3 per cent for industry funds and 2.8 per cent for retail funds, while corporate funds returned 2.7 per cent.