SMSF contributions highest since 2009

The average self-managed superannuation fund (SMSF) contribution amount tripled from $9,138 to $32,055 in the June 2017 quarter, according to SuperConcepts.

The latest SuperConcepts SMSF Investment Patterns Survey found 63 per cent of contributions being made during the last month of the quarter, and the large increased showed the significant impact of the 1 July 2017 changes to contribution rules.

SuperConcepts executive manager technical and strategic solutions, Phil La Greca, said the last time contribution levels were this high was in June 2009.

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 The survey also found a continued spike in benefit payments which almost doubled from $27,900 to $50,313.

Of the benefit withdrawals, 89 per cents were pension payments and 11 per cent lump sum payments, this was a reversal of the March quarter where 40 per cent of payments were paid as lump sums.

“Benefit payment levels continued to climb as a result of the transfer balance cap of $1.6 million which restricts the amount a person may have in a pension phase,” La Greca said.

“Members implemented withdraw and re-contribution strategies including starting a new 100 per cent tax free pension and making contributions to a spouse to try and equalise member balances and maximise access to the $1.6 million pension transfer balance cap for both persons.”

Cash contributions increased from 18 per cent to 19.8 per cent of total allocations, and resulted in a drop in other asset classes, especially Australian equities that dropped from 36.7 per cent to 35.4 per cent.

“As contributions start to get invested, we anticipate a lowering of the high cash levels we saw in the second quarter. The $1.6 million transfer balance cap limit also means that minimum pension levels will fall, so again, less cash will be needed,” La Greca said.



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