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Super assets break $4tn in September quarter
The local super industry now commands more than $4 trillion in assets, boosted by impressive quarterly returns.
The Australian Prudential Regulation Authority’s (APRA) latest quarterly superannuation statistics revealed that total superannuation assets totalled $4.1 trillion as at September, breaking $4 trillion for the first time.
This was an increase of 3.7 per cent over the quarter, with $2.8 trillion of total assets hailing from APRA-regulated funds.
Now, industry funds manage an impressive $1.43 trillion in assets, with retail funds trailing at $789.3 billion, public sector funds at $565.3 billion, and corporate funds at $47.6 billion.
“Superannuation returns were strong over the last 12 months, with a 13.4 per cent return in the year to September 2024,” the prudential regulator said.
The five-year annualised rate of return was 5.9 per cent.
Total contributions for the year to September rose 13.1 per cent over the previous corresponding period, at $191.3 billion. Of this, $49.4 billion stemmed from 1Q25.
“Of this, members contributed $50.5 billion over the year and $14.9 billion in the September quarter, a decrease of 21 per cent compared to the June quarter,” APRA said.
“This decrease is expected with members maximising their annual contribution limits before the end of the financial year.”
Meanwhile, employer contributions were $34.5 billion for the quarter and $140.8 billion for the year, 11.4 per cent higher compared to the previous 12 months.
According to APRA, this growth was driven by the increases in the super guarantee rate to 11 per cent from July 2023 and 11.5 per cent from July 2024 and seasonally adjusted wages rising by 3.5 per cent for the year.
Moreover, benefit payments totalled $119.9 billion for the year to September, an 11.4 per cent increase.
“This increase is attributable to a 20.3 per cent increase in pension payments and a 4.9 per cent increase in lump sum payments,” it said.
Last month, research house SuperRatings said that strong returns over the period helped deliver the strongest first quarter result since 2013.
Namely, superannuation returns continued to defy expectations amid market volatility in a typically subdued time of year, with the median balanced option returning 1.1 per cent in September.
With the median balanced option estimated to have delivered 3.4 per cent for the quarter, the result marks the strongest first quarter return in more than a decade.
However, some experts said that the growing influence of super funds on the local economy could amplify market shocks.
While the Reserve Bank of Australia (RBA) has noted the growing importance of the country’s super sector to financial system stability due to both its size and its connections to banks, it has also flagged the increasing presence of risks.
“The value of assets managed by superannuation funds doubled in the decade to 2024 and is expected to continue to grow faster than the overall financial system,” the RBA said.
As the superannuation sector has grown, the central bank said its financial ties to the banking system have intensified, with funds holding nearly one-third of bank short-term debt securities and over a quarter of bank equity, which could amplify financial shocks if their investment actions become correlated during market stress.
“A recent illustration occurred during the onset of the pandemic in Australia when superannuation funds increased their sale of bank debt securities back to issuing banks, adding to bank funding pressures – which in turn increased funding costs across the financial system,” the RBA said.
AUTHOR
Jessica Penny
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