Powered by MOMENTUM MEDIA
investor daily logo

Super contribution growth at seven-year high

  •  
By Scott Hodder
  •  
2 minute read

Discretionary superannuation contributions have seen the “fastest growth” since June 2007, a report from the Financial Services Council (FSC) has found.

The FSC Bond Report analysed the performance of the superannuation industry for the September quarter of 2014.

Commenting on its findings, FSC chief economist James Bond said between September 2013 and September 2014 member contributions have increased 38 per cent from $4.2 billion to $5.9 billion.

“This is the fastest growth since June 2007,” Mr Bond said. “The significant increase in discretionary contributions was most likely driven by two changes in concessional caps from 1 July 2014.”

==
==

“Discretionary superannuation contributions have accounted for the $1.6 billion (7.2 per cent) growth in superannuation contributions since September 2013 while employer contributions − that is, mostly compulsory payments − have remained flat,” Mr Bond said.

“This is evidence of the income recession which has resulted from low employment and wages growth. There has effectively been no growth in employer contributions for two years,” he said.

The FSC also pointed out the strong growth for this quarter could reflect the increase in thresholds for tax concessional contributions from $25,000 to $30,000 on 1 July 2014.

“Some of the increase in the quarter reflects the behaviour of individuals holding over contributions to the new financial year to take advantage of the new rule, [so] it would be expected that member contributions will remain at a new higher level,” a statement from the FSC said.

The FSC also commented on the new data APRA has released in its Quarterly Superannuation Performance report for September, stating it is a “substantial improvement”.

“The data now includes a breakdown of assets held in MySuper products, including ‘generic’ and ‘large employer’. [This] is a substantial improvement and provides a good basis for analysing industry trends and the impact of policy changes,” a statement from the FSC said.

 

Super contribution growth at seven-year high

Discretionary superannuation contributions have seen the “fastest growth” since June 2007, a report from the Financial Services Council (FSC) has found.

investordaily image
investordaily image
ID logo

Comments powered by CComment