Nearly a decade of super growth comes to a halt

Total Australian superannuation assets declined for the first time in nearly a decade last financial year, according to the latest data released by the Australian Prudential Regulation Authority (APRA).

The industry overview data revealed that assets had decreased by 2.1 per cent during the year to June 30, 2008, to stand at $1.17 trillion, suggesting that the decline is likely to be far more significant when the regulator’s statistics take account of the adverse conditions which prevailed in the latter half of last year.

And what will be disturbing for some sectors of the superannuation industry is that the APRA data has revealed the continued growth of small superannuation funds while retail funds actually declined and industry funds barely held ground.

APRA said the number of superannuation entities had increased by 8.4 per cent during the year to total 394,206, with the increase largely due to growth of ATO-regulated self-managed superannuation funds, which grew by 8.7 per cent to 30,991 funds.

When it came to member accounts, small funds also experienced the strongest growth, rising by 8.8 per cent, while the number of member accounts in retail funds grew by 5.8 per cent and those in industry funds grew by 5.5 per cent.

The APRA data also revealed the degree to which superannuation returns had gone into decline in the latter half of the financial year, stating that the return on assets for superannuation entities with more than four members had been negative 7.8 per cent for the year to June 2008.

Breaking this down, it said corporate funds had a return on assets of negative 5.3 per cent, public sector had a negative 5.7 per cent return, industry funds had a negative 5.9 per cent and retail funds had a negative 10.3 per cent.