Advice drives up personal super contributions

Lockdowns and other factors including greater engagement with financial advice helped drive a strong increase in personal superannuation contributions, according to the latest data from the Australian Prudential Regulation Authority (APRA).

APRA’s quarterly superannuation performance publication covering the December quarter revealed that personal contributions increased 60.5% over the year while total contributions totalled $34.3 billion for the quarter and $139.1 billion for the year ending December.

It said that on a quarterly basis, this was a decrease of 1.0% over the previous quarter, but that over the year, total contribution levels had increased by 15.5% and were above long term trends.

“Employer contributions increased by 6.6% over the quarter to $26.4 billion. This was an increase of 8.7% over the same period last year,” APRA said.

“Super Guarantee (SG) contributions account for nearly three quarters of employer contributions ($20.0 billion). This was 9.8% higher than the same period last year, and follows the SG increase from 1 July 2021 to 10%.”

It said member contributions declined by 20% over the quarter to $7.9 billion, but remained at a significant increase of 58.9% over the year ending December 2021 ($36.4 billion).

“The main driver of this has been a strong increase in personal contributions (60.5% over the year). This is likely due to a range of member reactions following COVID-19 and its related initiatives, such as increases in lockdown savings and stronger engagement with financial advice. This can be observed in quarterly inflows over the year for personal contributions which have been at elevated levels compared to previous years,” APRA said.

It said the rate of return (ROR) was 2.6% over the quarter to December 2021.

“This is higher than returns achieved over the September 2021 quarter (1.7%). Overall investment performance over the past 12 months has been strong, at an annual ROR of 12.8% compared to the annual ROR for December 2020 (3.10%). The five year average annualised ROR was 7.9%.