APRA data confirms super lump sums still a factor

Mike Taylor

Managing Editor and Publisher

29 May 2024

Despite the Government’s push to encourage superannuation fund members into retirement income products, there has been an increase in the number of people taking lump sums, according to the latest data from the Australian Prudential Regulation Authority (APRA).

The APRA superannuation performance statistics covering the March quarter not only confirmed the degree to which superannuation fund inflows are now being offset by the exit of baby boomers they also revealed just how many of those boomers were exiting and taking lump sums.

APRA’s chart covering benefit payments starkly reveals the impact of the former Government’s COVID-19 hardship superannuation early release program between early 2020 and mid-2021 with an upward trend thereafter.

The data showed that while the increase in the Superannuation Guarantee to 11% together with increased wages had driven Australia’s total superannuation assets up by 4.2% to $3.9 trillion, outflows in the form of benefit payments are becoming an increasing factor.

It found that benefit payments increased by 18.1% for the March quarter to $26.1 billion and $112.9 billion for the year with the increase resulting from an 18.4% increase in lump sum payments and a 17.7% increase in pension payments.

“Total benefit payments for the quarter comprised $13.8 billion of lump sum benefit payments and $12.3 billion of pension payments,” it said noting that net contribution flows (contributions plus net benefit transfers, less benefit payments) were $13.9 billion meaning that net contribution flows for the year to March decreased by 3.9% to $59.8 billion.

More broadly, the APRA data identified an 11.3% increase in contributions for the year to $177 billion made up of $133.3 billion in employer contributions and an 8.2% increase in member contributions to $43.7 billion.