Superannuation assets grew by 1.1 per cent over the past year to stand at some $3.5 trillion at the end of March 2023.
Quarterly superannuation statistics released by the Australian Prudential Regulation Authority (APRA) noted strong rebound in financial markets in Q4 2022 and Q1 2023 and continued strong contribution inflows.
In March last year, total superannuation assets stood at $3.4 trillion.
This growth was driven, in part, by the superannuation guarantee (SG) increase to 10.5 per cent from 1 July 2022 and a strong labour market, APRA said.
Meanwhile, contributions rose by 11.3 per cent to $159 billion in the year ending in March 2023.
Member contributions increased over the year by some 7.5 per cent to $40.5 billion and employer contributions saw a larger margin, growing by 12.6 per cent to $118.6 billion.
The upward trend in employer contributions was likely to continue following the implementation of payday super as part of the 2023 Budget. As part of the measure, employers would be required to pay employees’ superannuation at the same time as their salary and wages and would be formally implemented in July 2026, though super bodies urged employers to implement it earlier.
In 2019-2020, the Australian Taxation Office (ATO) had estimated $3.4 billion worth of super, or almost 5 per cent of the total expected SG contributions for the year, had gone unpaid.
Additionally, APRA’s Q1 2023 data found that benefit payments had witnessed an increase of 13.8 per cent to reach $95.8 billion. Of this, pension payments grew by 6.1 per cent to $42.3 billion and lump sum payments grew by 20.8 per cent to $53.5 billion.
“Both increases are in-line with longer term trends due to a maturing superannuation system and ageing population,” APRA said.
The proposed reforms have been described as a key step towards delivering better products and retirement experiences for members, with many noting financial advice remains the “urgent missing piece” of the puzzle.
Jim Chalmers has defended changes to the Future Fund’s mandate, referring to himself as a “big supporter” of the sovereign wealth fund, amid fierce opposition from the Coalition, which has pledged to reverse any changes if it wins next year’s election.
In a new review of the country’s largest fund, a research house says it’s well placed to deliver attractive returns despite challenges.
Chant West analysis suggests super could be well placed to deliver a double-digit result by the end of the calendar year.