Higher SG disguises super drawdowns impact

The degree to which Australian superannuation funds are having to adjust to members entering the draw-down phase has been reinforced by the latest quarterly data revealing an 11.4% increase in benefit payments over 12 months.

The Australian Prudential Regulation Authority (APRA) said the increase was attributable to a 20.3% increase in pension payments and a 4.9% increase in lump sum payments over the year to September 2024.

It said total benefit payments for the September quarter comprised o $17.7 billion of lump sum benefit payments and $14 billion of pension payment.

Much of the impact of members entering draw-down is being obscured by increases in the superannuation guarantee and higher wages.

The APRA analysis said total contributions were $49.4 billion for the quarter and reached $191.3 billion in the year ending September 2024, an increase of 13.1% from the previous year.

It said that, of this, members contributed $50.5 billion over the year and $14.9 billion in the September quarter, a decrease of 21.0% compared to the June quarter, noting that the decrease was  expected with members maximising their annual contribution limits before the end of the financial year.

“Employer contributions were $34.5 billion for the quarter and $140.8 billion for the year ending September 2024, 11.4% higher compared to the previous year,” it said. “This growth was driven by the increases in the super guarantee rate to 11.0% from July 2023 and 11.5% from July 2024, and seasonally adjusted wages rising by 3.5% for the year.

Total superannuation assets in Australia increased by 3.7% in the quarter to reach $4.1 trillion s at September, of which $2.8 trillion are in APRA regulated funds.

APRA noted that superannuation funds wre strong with a 13.4% return in the year to September.