Low confidence levels are clawing member contributions to superannuation funds, Financial Services Council (FSC) economist James Bond said.
While strong domestic economic and jobs growth buoyed compulsory contributions, Bond said, "low levels of confidence are continuing to have a negative impact on discretionary contributions".
Member contributions were $0.32 billion (6.6 per cent) lower than in the March quarter 2011, despite employer contributions being $1.6 billion (10.4 per cent) higher than in the previous corresponding period.
"The marginal quarterly decline in total contributions against the usually strong decline between December and March and strong growth through the year of $1.3 billion (6.8 per cent) indicates that March was a strong quarter for contributions to superannuation funds," he said.
The strong domestic economy was driving solid growth in employer contributions (10.4 per cent through the year), reflecting employment and wages growth.
However, member contributions continue to be weak - 9.4 per cent lower through the year - reflecting low investor confidence.
Contributions to the Australian Prudential Regulatory Authority (APRA) regulated superannuation funds were $20.1 billion in the March quarter, down $0.2 billion (1.1 per cent) on the December quarter 2011, but up $1.3 billion (6.8 per cent) on the same quarter in 2011.
In seasonally adjusted terms, total contributions rose $0.7 billion (3.3 per cent) in March meaning contributions were higher than would usually be expected for March, and the seasonally adjusted series shows an established upward trend in total contributions since mid-2010.
Contributions have a strong seasonal pattern, peaking in June each year, followed by a significant decline in the September quarter before returning to average levels in December.
APRA-regulated superannuation funds under management (FUM) (corporate, retail, industry and government) rose $53 billion (6.1 per cent) to $916.5 billion.
Self-managed superannuation funds FUM rose $19.5 billion (4.9 per cent) to $416.4 billion.
