Employers push super contribution growth

Superannuation contributions for Australian Prudential Regulation Authority (APRA) regulated funds have hit their highest growth levels since the global financial crisis, according to the Financial Services Council's (FSC's) bond report.

High levels of employment propelled 7.3 per cent growth in total contributions to $85.9 billion in the 2011-12 financial year, compared to $80.1 billion in the 2010-11 financial year.

But the growth came from compulsory contributions and not discretionary contributions which decreased by $0.2 billion over the same period.

FSC chief economist James Bond said good employment numbers were at the source of increased contributions, while investor confidence was having an ill effect on discretionary contributions.

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"Discretionary flows continue to disappoint reflecting a lack of consumer and investor confidence. Although discretionary flows represent only around 20 per cent of total flows, strong voluntary flows are necessary if Australians are to have enough money saved for their retirement," Bond said.

The Bond Report relies on the Australian Prudential Regulation Authority's quarterly data on APRA-regulated super fund contributions.

APRA reported total contributions of $90 billion, however, the FSC removed a one-off $4.6 billion superannuation liability contribution by the NSW Government in the June quarter as it almost doubled contributions to public sector funds in the second quarter.