New data released by the Australian Prudential Regulation Authority (APRA) has revealed that superannuation assets totalled $3.49 trillion at the end of the March quarter.
This was 1.1 per cent higher than a year earlier, when total super assets sat at $3.46 trillion, and 3.2 per cent higher compared to last quarter.
“Superannuation assets grew strongly in the March quarter of 2023 as a result of both the ongoing recovery in investment markets and continued strong contribution flows,” APRA said.
According to APRA, total super assets have now returned to levels last recorded at the end of December 2021 ($3.5 trillion) and have recovered from the declines experienced in the June and September quarters of last year.
Total assets in MySuper products rose 5.1 per cent on a quarterly basis or 4.3 per cent annually to $964.5 billion, overtaking the previous high of $946.8 billion reached in December 2021.
Contributions were reported to have increased by 11.3 per cent to $159.0 billion in the year to March 2023, including $37.5 billion of contributions during the March quarter.
Employer contributions totalled $118.6 billion for the year, a 12.6 per cent increase on the previous year, which APRA said was due in part due to an increase in the superannuation guarantee (SG) rate to 10.5 per cent as well as strong labour force outcomes over the year.
“For the four quarters to March 2023, SG contributions ($91.8 billion) accounted for around three quarters of employer contributions and this proportion is expected to increase alongside future SG increases,” the prudential regulator said.
Meanwhile, member contributions totalled $40.4 billion for the year ending in March 2023, 7.5 per cent higher compared to the year ending in March 2022.
“While there were large spikes observed in the four quarters to March 2022 following COVID-19 and its related initiatives, member contributions have continued to increase and remain above historical trends,” APRA said.
Benefit payments reached $95.8 billion, an increase of 13.8 per cent over the year, including lump sum payments, which rose by 20.8 per cent to $53.5 billion, and pension payments, which increased by 6.1 per cent to $42.3 billion.
Super performance and asset allocation
APRA reported that the rate of return for entities with more than six members was 3.5 per cent during the March quarter of 2023, but 0.4 per cent over the four quarters to March.
“Investment markets have been volatile over the four quarters to March 2023 owing to aggressive monetary tightening by central banks globally to curb inflation which slowed economic growth,” the regulator said.
The five-year average annualised rate of return was reported to be 5.6 per cent, down from 6.8 per cent in March 2022.
Total assets for entities with more than six members increased by 4.0 per cent or $97.2 billion over the March 2023 quarter to $2.5 trillion.
Of the $2.3 trillion in total investments, APRA said that 53.9 per cent were investments in equities, including 22.3 per cent in Australian listed equities, 26.7 per cent in international listed equities, and 4.9 per cent in unlisted equities.
Fixed income accounted for 19.0 per cent of total investments, while cash investments accounted for 9.3 per cent. Property and infrastructure accounted for 15.5 per cent, while other assets including hedge funds and commodities, accounted for 2.2 per cent.