SMSF sector set for negative cash flow
Double-digit growth rates are unlikely to continue in the self-managed super fund (SMSF) sector, according to DEXX&R's latest projections report.
It projected negative cashflows would occur for the first time during calendar 2012.
SMSF benefit payments are expected to increase to $63 billion by December 2015, $20 million more than contributions which are estimated will be $40.5 billion at that time, the report said.
DEXX&R said the prediction aligned with the older age profile of SMSF members and an increasing number of SMSFs moving into the retirement income drawdown phase.
It projected the total superannuation market would increase by an average annual growth rate of 7.7 per cent per annum to $3,171 billion at December 2012.
The growth phase in equity values would encourage money sitting in cash and term deposits and bonds to move back into equities, reversing the post-GFC trend of holding cash, including for SMSFs, DEXX&R said.
The retirement incomes market would grow at 9.6 per cent per annum to $320 billion as at December 2022, with allocated pensions representing 97 per cent of total funds under management and the remaining 3 per cent held in annuities.
Inflows into allocated pensions would also increase, due to the transfers of retiree accounts from SMSFs to allocated pensions in order to minimise administration costs.
AUTHOR
Staff Writer
Money Management staff writers are writers who contribute to the website from time to time. If you would like to discuss the content contained within this article please contact us.
Recommended for you
The Actuaries Institute has released a framework to help super funds deliver affordable guidance and advice to millions approaching retirement.
Labor’s finance minister has dismissed claims the government directs super fund investments after questions over Australia’s new US deal.
Australia’s average superannuation balance has climbed to a record high, with women’s savings share rising and reliance on the age pension falling.
APRA has softened several governance reform proposals following extensive consultation with banks, insurers, and super funds across Australia.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
DomaCom DFS Mortgage
215.17 3 y p.a(%)
2
Loftus Peak Global Disruption Fund Hedged
118.15 3 y p.a(%)
3
Global X 21Shares Bitcoin ETF
75.00 3 y p.a(%)
4
UBS Solactive Global Pure Gold Miners UCITS ETF Dis USD
61.11 3 y p.a(%)
5
Global X Ultra Long Nasdaq 100 Complex ETF
60.93 3 y p.a(%)
