APRA's latest superannuation stats: what it means for your retirement nest egg

Realistic glowing golden egg lying gently in a bird nest that is lit up by the egg's glow

The Australian Prudential Regulation Authority (APRA) has released its 2023 September quarterly superannuation performance statistics report, which suggests that the superannuation industry is facing some challenges in the current economic environment but is still relatively well-positioned for the long term.

The APRA report highlights the impact of several factors on the superannuation industry's performance, including declining asset values and rising contributions. Let's examine the key highlights of the report and explore their implications for your retirement savings.

Key Highlights

Here's a quick look at the key takeaways from the report:

  • Contributions reached a healthy $42.3 billion in the September quarter, up a robust 12.5% year-on-year thanks to an increase to the Super Guarantee rate and a strong jobs market.
  • Despite a slight decline over the quarter, total superannuation assets remained at an impressive $3.5 trillion in September 2023.
  • Net contribution flows remained positive, reaching $10.7 billion in the September quarter. This means that more money is being put into the superannuation system than is being taken out, indicating that the industry is growing steadily.
  • The rate of return (ROR) for funds with more than six members dipped to -0.5% in the September quarter, reflecting recent market volatility.*
  • Equities remained a dominant investment class at 53.3%, despite the ROR blip

* The ASIC warns that past performance is not a reliable indicator of future performance.

Quarterly rate of return for entities with more than six members, September 2023

Line graph showing the quarterly rate of return for entities with more than six members, covering September 2018 through September 2023

What it means for you and your superannuation

The latest superannuation news is a bit of a mixed bag. On one hand, the industry's size and total assets keep growing, which is a good sign. But on the other hand, investment returns have taken a bit of a tumble throughout the quarter, which means your super balance might not be growing as fast as you'd like. So, it's important to remember that super is a long-term investment, and short-term ups and downs are to be expected.

The good news is that the overall outlook for super is still positive. The industry has a long history of delivering solid returns, and the growing number of contributions is making it even stronger. This means that, over time, you can be confident that your super will be there to help you enjoy a comfortable retirement.

Here are some things to keep in mind as you nurture your nest egg:

  • Market ups and downs are a natural part of investing. Super is a long-term investment, so don't be discouraged by temporary market fluctuations especially in your early years. Your super has ample time to recover and grow over time, regardless of market volatility.
  • Small personal contributions can make a big difference. Boosting your personal contributions can significantly boost your retirement savings. Even small, regular additions can grow into a substantial sum over time, thanks to compounding. Start contributing early to maximise your savings growth.
  • Your super is part of a bigger picture. While it's natural to focus on your individual balance, don't lose sight of the industry's overall growth trajectory. The superannuation sector's steady expansion contributes to its stability and strength, which, in turn, bodes well for your retirement security.
  • Diversify your super to match your risk profile and goals. According to Mozo research, nearly 70% of Aussies have never changed their super investment allocations despite changes in life stage and risk appetite. As your age and risk tolerance evolve, consider adjusting your portfolio accordingly. Most super funds offer options tailored to different needs, so choose one that aligns with your long-term financial goals.
  • Seek professional guidance if you need it. If you're feeling overwhelmed or unsure about your super, don't hesitate to seek professional advice. A financial advisor can help you develop a personalised strategy that aligns with your retirement goals and risk tolerance.

As you plan for your retirement, it's important to stay informed about the superannuation industry and make informed decisions about your savings. Regular contributions, a diversified investment portfolio, and a long-term perspective are key to achieving your retirement goals.

Feeling unsure about your current superannuation fund? Don't let uncertainty cloud your retirement plans. Head over to our superannuation guides hub where you can find all the information you need on how to change your super fund and other essential tips for saving effectively for retirement.