SMSF profile

Size of the SMSF sector

At 30 June 2019:

• the number of SMSFs was nearly 600,000, an increase of 15% over the five years from 2014–15
• there were over 1.125 million members of SMSFs
• SMSFs accounted for 99.7% of all super funds in Australia and collectively held 26% of the $2.9 trillion in super assets under management1.

Graph 1: Total super assets by fund type at 30 June 2014 and 30 June 2019

See table 1 and table 2 of the data tables.

Establishments and wind-ups

In the five years to 2018–19:

• the number of SMSFs grew by an annual average of 2.9%
• an average of 28,490 new funds were established annually (almost 2,400 per month). This is a declining trend from 34,000 establishments in 2014–15 to 20,000 in 2018–19 (–41%).

Our most recent lodgment data for 2017–18 shows that:

• average SMSF assets on establishment were $409,000, up 18% from $348,000 in 2013–14 and down 18% from $497,000 in 2016–17
• more than half (53%) of SMSFs had been established for more than 10 years, while 12% had been established for three years or less.

Approximately 22,700 SMSFs wound up in 2017–18, compared to an annual average of 15,000 for the five years to 2017–18. Of the SMSFs that wound up in 2017–18:

• the average assets held in the year before wind-up was $387,000, up from $274,000 for funds that wound up in 2013–14
• 46% reported assets of $200,000 or less in the year before their wind-up, down from 62% of funds that wound up in 2013–14
• 74% were in accumulation phase and 26% were in retirement phase.

See table 1, table 3, table 4, table 6 and table 7 of the data tables.

Growth of SMSF assets

At 30 June 2019 SMSF assets totalled $748 billion.2 In the five years to 30 June 2019, SMSF assets grew by $216.1 billion or 41%.

At 30 June 2018:

• SMSFs had assets of almost $1.3 million on average, up 6% from the previous year and 24% from 2013–14
• the median SMSF asset size was $720,000, up 9% from the previous year and 27% from 2013–14.

See table 2 and table 5 of the data tables.

Contributions, rollovers and benefit payments

A number of legislative changes began on 1 July 2017 as part of the 2016 Budget Super Reform package. These included reducing the concessional contribution cap to $25,000 per year and the non-concessional contribution cap to $100,000 per year (or $300,000 under the three-year bring-forward rule). A transfer balance cap of $1.6 million was also introduced.

It appears there was significant restructuring among SMSFs in 2016–17 in anticipation of these changes. In 2017–18 we are seeing a normalising of activities.

Contributions

Contributions to SMSFs increased in the years leading up to the change, in particular in the 2016–17 year.

• Total contributions to SMSFs peaked at $41.1 billion in 2016–17 before dropping 58% to $17.4 billion in 2017–18.
• The decline in contributions was most pronounced for member contributions, which peaked at $33.9 billion in 2016–17 before dropping 66% to $11.6 billion the following year.
• The reduction in employer contributions was not as substantial, dropping by 21% from $7.2 billion in 2016–17 to $5.7 billion in 2017–18.
• Average member contributions decreased from $129,000 in 2016–17 to $49,000 in 2017–18. Median member contributions dropped from $28,000 to $20,000 over the same period.
• Shifts in average and median employer contributions from 2016–17 to 2017–18 were again not as substantial. Average employer contributions dropped from $25,000 to $20,000, and median employer contributions dropped from $19,000 to $17,000.

Graph 2: Split of contributions to SMSFs by type and total, 2013–14 to 2017–18

In 2017–18 contributions to SMSFs accounted for 14% of all super contributions made in the superannuation sector.3

• Member contributions to SMSFs accounted for 37% of member contributions to all super accounts.
• Employer contributions to SMSFs accounted for 6% of employer contributions to all super accounts.

Graph 3: Contributions to SMSFs as a proportion of the superannuation sector by type and total, 2013–14 to 2017–18

Note: Total contributions to SMSFs is a percentage of total Australian super contributions.

Rollovers

Rollovers reported in 2017–18 include:

• $15.1 billion being rolled into SMSFs, down 19% from 2016–17
• $8.9 billion rolled out of SMSFs, up 1% from 2016–17.

Benefit payments

Benefit payments include lump sum, income stream, transition to retirement and combination payments.

Total SMSF benefit payments decreased by 15% from $44.3 billion in 2016–17 to $37.7 billion in 2017–18. Prior to this, benefit payments increased substantially from $35.0 billion in 2015–16. This may have been due to members preparing for the introduction of the transfer balance cap on 1 July 2017.

The drop in total benefit payments from 2016–17 to 2017–18 reflects a substantial reduction in income stream payments despite an increase in lump sum payments. Again, this is likely attributable to the introduction of the transfer balance cap.

In 2017–18:

• The average benefit payment per SMSF was $113,000, and the median payment was $67,000. This was a decrease of 22% and less than 1% respectively from the previous year.
• The number of SMSF members receiving a benefit payment decreased by 8%.
• 70% 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 made up 4.5% of total benefit payments, down from 8.4% in the previous year.

Over the five years to 30 June 2018 there was an overall net outflow of funds from SMSFs of $25.6 billion. This was mainly due to significantly higher benefit payments of $37.7 billion against contributions of $17.4 billion in the 2017–18 year.

Graph 4: Benefit payments from SMSFs by type and total, 2013–14 to 2017–18

See table 8, table 9, table 10 and table 11 of the data tables.

SMSFs by payment phase

In 2017–18:

• 57% of SMSFs were wholly in accumulation phase, down one percentage point from 2016–17
• 34% were wholly in retirement phase, up three percentage points
• the remaining 9% of SMSFs were in partial accumulation and retirement phase, down one percentage point
• 43% of SMSFs made retirement benefit payments to at least one member in 2017–18, up one percentage point from 2016–17
• of SMSFs that started to make retirement benefit payments, 55% were more than five years old and 18% were less than two years old
• 77% of funds established over the 10 years to 30 June 2018 had not started making retirement benefit payments.

See table 12 and table 13 of the data tables.

SMSF structure

At 30 June 2019, 61% of all SMSFs had a corporate trustee.4 In the three years to 30 June 2019, 82% of newly registered SMSFs were established with a corporate trustee.

SMSFs with two members continue to be the dominant structure, accounting for 70% of SMSFs at 30 June 2018. SMSFs with a single member made up 23%of funds, while those with three and four members each made up 4%.5

See table 14 of the data tables.

Service providers

In 2017–18:

• SMSFs used the services of around 5,300 SMSF auditors and 14,100 tax agents
• 51% of SMSF auditors performed five to 50 SMSF audits, and 28% of SMSF auditors performed 51 to 250 audits
• 6% of SMSF auditors conducted more than 250 audits, representing 51% of total SMSF audits
• the average audit fee was $687 and the median audit fee was $550
• 99% of SMSFs used a tax agent to lodge their 2017–18 SMSF annual return. For these agents, the average number of SMSF clients was 34 and the median was 10.

See table 15, table 16 and table 17 of the data tables.

Compliance

Auditor contravention reports (ACRs) remained relatively stable at close to 2% of all SMSFs each year.6

• In 2018–19, 10,300 SMSFs had ACRs lodged with 27,700 contraventions. Just under half (47%) 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. 

See table 18 of the data tables.

Footnotes

¹ APRA, June 2019 Quarterly Superannuation Performance, 27 August 2019, Key Statistics Table.

² ATO, Self-managed super fund quarterly statistical report – June 2019.

³ APRA, Annual Superannuation Bulletin, June 2017, table 4.

⁴ Based on registrations and ABR data. Refer to Data tables, table 14.

⁵ Self-managed super fund quarterly statistical report – June 2019.

⁶ As per ATO ACR data as at 30 June 2018.