Contributions fall off the back of weak fundamentals

FSC research and ratings APRA financial services council global financial crisis cent superannuation funds

5 September 2013
| By Staff |
image
image
expand image

Rising unemployment and slowing GDP growth may be behind a recent drop in employer superannuation contributions, according to the Financial Services Council (FSC). 

Weak growth (1.9 per cent) in total contributions for the 2012/13 financial year to Australian Prudential Regulation Authority (APRA)-regulated funds could also be the product of leakage to the self-managed sector, its latest Bond Report said, 

It found total contributions for the June quarter were $112 million (0.4 per cent) less than June 2012, following a decline of $399 million between the March and June quarters. 

June witnessed the lowest levels of employer contributions since the global financial crisis, which added to a $489 million drop between June 2012 and June 2013 (2.4 per cent) and overshadowed a 6.6 per cent increase in employee contributions to $377 million for the year. 

“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,” said FSC chief economist James Bond. 

“Rising unemployment and slowing GDP growth could be the reasons why people are holding back salary sacrificed contributions to their superannuation funds.”

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

This verdict highlights something deeply wrong and rotten at the heart of the FSCP. We are witnessing a heavy-handed, op...

12 hours ago

Interesting. Would be good to know the details of the StrategyOne deal....

4 days 17 hours ago

It’s astonishing to see the FAAA now pushing for more advisers by courting "career changers" and international recruits,...

3 weeks 2 days ago

Insignia Financial has made four appointments, including three who have joined from TAL, to lead strategy and innovation in its retirement solutions for the MLC brand....

2 weeks 4 days ago

A former Brisbane financial adviser has been charged with 26 counts of dishonest conduct regarding a failure to disclose he would receive substantial commission payments ...

3 days 15 hours ago

Pinnacle Investment Management has announced it will acquire strategic interests in two international fund managers for $142 million....

2 days 18 hours ago