Weak inflows for super.
The June 2013 quarter defied the seasonal pattern of strong superannuation contributions at the end of financial year, instead recording one of the weakest quarters for contributions since the global financial crisis, according to the Financial Services Council’s Bond Report, released today.
FSC chief economist, James Bond said: “Superannuation contributions at the end of the financial year have not been as strong as we would usually expect.”
Total contributions for June 2013 were $112 million lower than June 2012. Contributions also fell by $399 million between the March and June quarters in seasonally adjusted terms.
“Weak growth in September 2012 and March 2013 have combined with the decline in this quarter to result in weak growth of 1.9 per cent for the last financial year,” Mr Bond said.
Total contributions in the 2012-13 financial year were $87.5 billion.
The main driver of the weak result was a decline in employer contributions. These fell by $489 million between June 2012 and June 2013.
“The decline in employer contributions in three of the past four quarters has overshadowed an increase in member contributions,” Mr Bond said.
“Rising unemployment and slowing GDP growth could be the reasons why people are holding back salary sacrificed contributions to their superannuation funds.”
“It is also possible that the leakage to self-managed funds is taking higher contributing members from the APRA regulated fund sector,” he said.
