SMSF returns match APRA counterparts

Media Releases

SMSF returns match APRA counterparts

SMSF Association Media Release

19 January 2018

Returns from the SMSF sector were on a par with the APRA- regulated superannuation sector in 2015-16 – welcome news for the more than 1.1 million people who chose to manage their own retirement savings.

SMSF Association CEO John Maroney says the Australian taxation Offices’ (ATO) 2015-16 SMSF statistical overview showing the SMSF sector’s performance matching APRA-regulated superannuation funds strongly supports the Association’s view that SMSF members can manage their investment portfolios effectively.

“This strong performance, the fifth consecutive year of positive returns, is also an endorsement of the SMSF specialists who advise many members about their investment portfolios.”

The ATO figures reveal an SMSF sector growing in a sustainable and robust manner with a 26% increase in the number of SMSFs over the past five years.

Balances of SMSFs also have continued to grow strongly with the median SMSF balance increasing to $642,000 – a healthy 30% growth over the past five years.

Maroney says the sector is delivering on the Government’s objective for superannuation to provide income in retirement, with 94% of all SMSF benefit payments being in the form of a pension with the median pension payment being $63,000 a year.

“This high percentage of pension use by SMSFs has been a consistent positive aspect of the sector as highlighted in the ATO’s annual statistical publication over a long period.”

This year’s statistical bulletin also shed new light on the trustee structure of SMSFs as the ATO has been able to harness the benefit of an improved data set, with the
statistics showing that 57% of SMSFs are managed through a corporate trust structure and 81% of newly registered SMSFs in 2017 have a corporate trustee.

“This is a positive for the sector as the SMSFA has always advocated that corporate trust structures are best practice due to their advantages for SMSF administration, succession planning and aging trustees.”

Maroney says the statistics provide timely evidence to disprove recent alarmist headlines that SMSFs are responsible for a surge in Australian household debt.

“The figures show that total borrowings by SMSFs using limited recourse borrowing arrangements total about $23.5 billion or only 4% of all SMSF assets – hardly a number that would suggest SMSFs are on a borrowing binge.”