These two charts from research firm Tria Investment Partners show the pace at which Australia’s $2.1 trillion superannuation sector is maturing. Net inflows into both self-managed super funds and large pooled funds (measured by those with assets of more than $1 billion) are falling, primarily as more superannuants are retiring and withdrawing their savings.
Much has been trumpeted about the size of the self-managed fund sector, but its rate of growth has fallen dramatically since the global financial crisis. The self-managed super segment – at least in terms of funds under management – faces the dual challenges of having a greater proportion of members in retirement and being more susceptible to changes in the super rules, particularly to the annual contributions limits.
There might be an increase in super contributions between now and June as savers seek to top up their accounts before the annual contributions caps fall from July 1. The lower limit is expected to hit self-managed super funds disproportionately as traditionally members of these funds have made more voluntary contributions.
From July 1 superannuants will be limited to injecting $25,000 a year of pre-tax earnings into super, down from the current level of $30,000, or $35,000 depending on a saver’s age. The limit on after-tax contributions will fall to $100,000 a year from $180,000.