Slow employment growth weighs down super contributions
Slower employment growth and a 0.2 per cent decline in wages during the September quarter has led to the first quarterly decline in employer contributions since December 2009, according to the Financial Services Council (FSC).
Employer contributions declined by $453 million or 2.8 per cent on September 2011.
FSC chief economist James Bond said the employment and wages factors were almost certainly having an impact on compulsory superannuation contributions.
Total contributions to superannuation funds also fell dramatically in the September quarter, the FSC's latest bond report revealed.
It said total contributions for the year to September were $85.5 billion, an increase of $3.2 billion from September 2011 - but it followed a decline of $1 billion in the 12 months to the June quarter - the first decline in 12-month super contributions since June 2010.
Member contributions have fallen for the fourth consecutive quarter, which reflected an ongoing lack of confidence in the economy, it said.
The FSC said that although contributions often decreased in September after an end-of-tax-year contributions frenzy in the June quarter, they had fallen even further in 2012.
"Although a decline in contributions is expected every September quarter reflecting large contributions in June before the end of the tax year, the decline in contributions in September 2012 is larger than the usual seasonal pattern," Bond said.
"Australians remain very cautious about putting their savings in superannuation at the moment. A flat domestic economy and continued uncertainty overseas have combined to see poor flows to superannuation," he said.
AUTHOR
Staff Writer
Money Management staff writers are writers who contribute to the website from time to time. If you would like to discuss the content contained within this article please contact us.
Recommended for you
Australia’s largest super fund, AustralianSuper, has announced multiple additions to its executive leadership team to focus on global growth and innovation.
Super Review rounds up last month’s biggest people moves in the superannuation industry, including a new fund chair and a private markets head.
Investment returns for the Future Fund hit a milestone in September, adding $200 billion in value for the first time ever.
Australia’s largest super funds have deepened private markets exposure, scaled internal investment capability, and balanced liquidity as competition and consolidation intensify.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
DomaCom DFS Mortgage
225.31 3 y p.a(%)
2
Loftus Peak Global Disruption Fund Hedged
120.73 3 y p.a(%)
3
Global X 21Shares Bitcoin ETF
72.47 3 y p.a(%)
4
Paradice Australian Mid Cap A
69.09 3 y p.a(%)
5
Global X Ultra Long Nasdaq 100 Complex ETF
61.94 3 y p.a(%)
