Growth of SMSF assets
The following data is taken from Data tables, table 1.
In the five years to 30 June 2018, SMSF assets grew by $271.6 billion or 57%. In value terms, SMSFs account for a significant part of the overall growth of the $2.7 trillion Australian superannuation industry.8
Graph 1 shows the growth in superannuation assets in the five years to 30 June 2018 by fund type.9 Total superannuation assets in the period grew by 71% or $1,126 billion, of which SMSFs contributed 24%.
Graph 1: Growth of superannuation assets by fund type, 2013-14 to 2017-18
Growth in numbers of SMSFs
The follow data is taken from Data tables, table 1 and table 2.
In the five years to 30 June 2018, the number of SMSFs grew by 19% from 501,000 to 596,000.
Graph 2 shows annual growth in SMSFs over the four years. Annual growth averaged 3.5% over this period, gradually declining from 4% in 2014 to 2.5% in 2018.
Graph 2: Annual growth in the number of SMSFs, 2013–14 to 2017–18
Over the five years to 30 June 2018:
- an average of 31,000 new funds were established annually (or approximately 2,600 a month). There was a declining trend from 33,000 new SMSFs in 2013–14 to 25,000 in 2017–18 (–25%)
- the number of SMSF wind-ups averaged approximately 12,100 a year10
- 55% of SMSFs had been established for more than 10 years while 14% had been established for three years or less.
Of SMSFs established in the 10 years to 30 June 2017, 88% were still in existence at that date. On average, 2.5% of SMSFs wind up in their first year of establishment. The lowest proportion of wind-ups tends to occur in their second year of operation, marginally increasing in subsequent years.11
Of SMSFs that wound up in 2016–17:
- 48% had assets of $200,000 or less at the end of the previous year, down from 69% that wound up in 2012–13
- 65% of SMSFs that wound up in 2016–17 were in the accumulation phase.
Contributions to SMSFs
The following data is taken from Data tables, table 3.
In 2016–17:
- total contributions to SMSFs were $41.8 billion, of which $34.7 billion (83%) were member contributions and $7.1 billion (17%) employer contributions. The median member contribution to SMSFs of $30,000 was significantly higher than the median employer contribution of $19,000, a consistent trend over five years
- members 55 years and older made 81% of member contributions to SMSFs and accounted for 56% of employer contributions
- contributions to SMSFs accounted for 26% of all super contributions.12 Member contributions to SMSFs accounted for 52% of member contributions across all super funds in 2017 and employer contributions to SMSFs accounted for 8% of all employer contributions.
In the five years to 30 June 2017, member contributions to SMSFs increased by 94%, while employer contributions increased by 31%. By comparison, member and employer contributions to all super funds increased by 60% and 31% respectively13
Graph 3 shows contributions to SMSFs as a proportion of all super fund contributions for the five years to 30 June 2017.
Graph 3: Contributions to SMSFs as a percentage of total Australian super contributions (by member, employer, and total), 2012–13 to 2016–17
Note:
* Total Contributions to SMSFs is a percentage of total Australian super contributions.
The percentages are calculated as: SMSF (member/employer/total) contributions divided by total super contributions (member/employer/total).
For further information on contributions, also see supplementary table 3, Data tables (XLXS, 598KB)This link will download a file.
SMSF rollovers
The following data is taken from Data tables, table 4.
In 2016–17, funds reported $18.3 billion being rolled into SMSFs and $9.2 billion rolled out of SMSFs, an increase of 23% and 68% respectively over 2015–16. This was most noticeable in the $2 million to $5 million balance funds.
These increases reflect SMSFs preparing for superannuation new measures that came into effect on 1 July 2017.
Most inward rollovers (64%) in 2016–17 involved SMSFs with assets of $200,000 to $2 million. Conversely, the majority of amounts rolled out (53%) involved SMSFs with assets of $500,000 to $10 million.
SMSF benefit payments
The following data is taken from Data tables, table 5.
Over the five years to 30 June 2017, benefit payments by SMSFs increased from $25.5 billion in 2012–13 to $46.4 billion in 2016–17. Similarly, the proportion of SMSF members receiving benefit payments rose by 11% over this period.14
In 2016–17:
- the average benefit payment per SMSF was $145,000, and the median payment was $67,000, 22% and 8% respectively higher than the previous year
- 87% of all benefit payments by SMSFs were in the form of an income stream including transition to retirement income streams
- transition-to-retirement income streams accounted for 8% of benefit payments, decreasing from a peak in 2013–14 of 13.1% to 8.3% in 2016–17.
For information on income stream benefit payments and lump sum payments specifically, see supplementary tables 5.1 and 5.2, Data tables (XLXS, 598KB)This link will download a file.
SMSF net flows
The following data is taken from Data tables, table 6.
During the five years to 30 June 2017, the overall net flow into SMSFs was $1.1 billion.
Graph 4 shows that over this period there was a 165% reduction in net flows into SMSFs, from a $5.1 billion net inflow to a $3.3 billion net outflow. This is largely attributable to member benefit payments increasing at a greater rate than member contributions.
Graph 4: Breakdown of SMSF fund flows, 2012–13 to 2016–17
Note:
* The net fund flow equals total contributions plus net transfers (inward minus outward rollovers) less benefit payments and total expenses.
SMSF payment phase
The following data is taken from Data tables, table 8.
For the year to 30 June 2017, 58% of SMSFs reported they were solely in the accumulation phase, a 2% increase from 2015-16. The remaining 43% reported being in pension phase – 11% in partial pension phase (making payments to some members), remaining at the same level as 2015-16 and 32% in full pension phase (making payments to all members), a drop of 2% from 2015-16.15
The number of funds that began making pension payments fell to 15,000 in 2016–17, from 22,000 in the previous year (a 33% decrease).
Of SMSFs that started pension payments in 2016–17, approximately 53% were over five years old; 19% were under two years old (of which 8% were in their first year of operation); and 28% between two and five years old. This is consistent with the pattern over previous years.16
Of funds established in the 10 years to 30 June 2017, 74% had not started making pension payments.
Service providers
The following data is taken from Data tables, table 9 and table 10.
For the 2016–17 year, there were 5565 SMSF auditors. Over the five years to 30 June 2017, the number of auditors conducting audits has steadily fallen.
Of these:
- 52% conducted between 5 and 50 audits
- 28% conducted between 51 and 250 SMSF audits
- 5% conducted more than 250 SMSF audits – with this group performing 49% of all SMSF audits, accounting for 48% of total SMSF assets for 2016–17, compared with 41% of audits and 42% of total SMSF assets for 2012–13.
SMSF auditors play a major role in regulating SMSFs. In 2016–17, the average audit fee was $688 and the median audit fee was $550. The median audit fee has remained constant since 2013. The average audit fee in 2016–17 is at its lowest point over the five-year period.
Approximately 13,600 tax agents lodged 99% of 2017 SMSF annual returns (SARs).17 For this group, the average number of SMSF clients was 33 and the median 10.
Half of the tax agents lodged SARs for 10 or fewer SMSFs, while 14% (or 1,960) had a single SMSF client. By contrast, 7% or 945 tax agents lodged a 2017 SAR for more than 100 SMSFs.
Over the five years to 30 June 2017, there was a 6% decrease in the number of tax agents lodging SMSF annual returns, attributable to 738 tax agents no longer performing this function.
Compliance
The following data is taken from Data tables, table 26.
Generally, the percentage of the SMSF population subject to auditor contravention reports (ACRs) remains relatively stable at close to 2% of all SMSFs each year.18
In 2017–18, 7,600 SMSFs had ACRs lodged with 14,800 contraventions.
At 30 June 2018, just under half (48%) of all contraventions were reported as rectified. The most commonly reported contraventions continued to be loans or financial assistance to members (21%), while in-house assets and separation of assets constituted 19% and 13% respectively.
Wind-ups
The following data is taken from Data tables, table 27.
Over the five years to 2016–17 the number of SMSF wind-ups averaged approximately 12,100 a year, with approximately 12,400 wind-ups reported for 2016–17.
Of SMSFs that wound up in 2016–17, 46% reported assets of $200,000 or less in the year before their wind-up, down from 69% of funds that wound up in 2012–13. The average assets held in the year before wind-up have increased over the five-year period, from $224,000 for funds wound up in 2012–13 to $383,000 for funds wound up in 2016–17.
The proportion of SMSFs that wound up in accumulation phase fell over the five years, from 73% in 2012–13 to 65% in 2016–17. SMSFs winding up in pension phase held more assets in the year before wind-up than those in accumulation phase. In 2016–17, SMSFs winding up in accumulation phase held on average $270,000 in assets in the previous year compared with $573,000 for those in pension phase.
- Footnote 8
- APRA, Annual Superannuation Bulletin June 2018, table 4
- Footnote 9
- ‘Other’ fund type includes ‘exempt schemes’ as per reporting method used by APRA in its quarterly superannuation bulletins.
- Footnote 10
- Average wind-up figures are based on an estimate for 2017–18 due to the time lag between when wind ups occur and when the ATO is notified by the SMSF.
- Footnote 11
- Based on SMSF annual return data over 10 years.
- Footnote 12
- APRA, Annual Superannuation Bulletin, June 2017, table 4.
- Footnote 13
- APRA, Annual Superannuation Bulletins – June 2013 to June 2017 editions.
- Footnote 14
- Based on superannuation annual returns for 2013–14 to 2016–17.
- Footnote 15
- Data collected at 31 March 2019
- Footnote 16
- Based on superannuation annual returns for 2015–16 and Australian Business Register.
- Footnote 17
- Based on superannuation annual returns for 2016–17.
- Footnote 18
- As per ATO ACR data as at 30 June 2018.