ATO figures still showing flow of funds to SMSFs

Rollovers into self-managed super funds (SMSFs) are still showing a drain of funds from the APRA-regulated funds in gross and net terms, says Graeme Colley, Director of Technical and Professional Standards of the SMSF Professionals’ Association of Australia (SPAA).

Colley says the latest figures from the Australian Taxation Office (ATO) conclusively show that over the five years up to 30 June 2013, $75.6 billion was rolled into SMSFs and only $19.9 billion was rolled out of SMSFs.

“On average, and on an annual basis, $15.1 billion rolled into SMSFs and $4 billion rolled out of SMSFs. These numbers hardly suggest an SMSF sector in decline or even treading water. Indeed, what they comprehensively show is that SMSFs retain their strong appeal.”

Colley says the data does not distinguish between amounts rolled between SMSFs and amounts rolled to or from non-SMSFs.

“However, the net reported result is an inward rollover amount of $55.7 billion over the five years, with most amounts rolled in (65%) or rolled out (60%) involving SMSFs with assets of between $500,000 and $5 million.”

Colley says another important trend to emerge from the ATO figures was that the benefit payments from SMSFs confirm their role in providing retirement incomes and meeting government policy objective of superannuation providing income streams for Australians.

“In the 2009 financial year, income streams amounted to 75.7% of all benefit payments from SMSFs of which Transition to Retirement Income Streams (TRIS) amounted to 9.1% of total payments.

“By the 2013 financial year the proportion of income streams paid from SMSFs had increased to 93.2% of which 11.4% were TRIS and just 6.8% were lump sums compared with 13.8% of lump sums in the 2009 financial year.”

He adds that the 2012-13 financial year shows a deficit of the payment of benefits over all contributions made to SMSFs of just over $2.23 billion.

“This was the first year in which employer, member and other contributions combined were less than the amount of benefit payments. However, when net rollovers are added to contributions there remains an increase in net inflows to funds from both contributions and net rollovers of just over $10 billion.”