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Self-managed super funds (SMSFs) in Australia are privately run super funds. Historically, SMSFs have been allowed to have between one and four members (who must also be trustees of their fund) but this has recently been increased to a maximum of six members.
The passage of the Treasury Laws Amendment (Self Managed Superannuation Funds) Bill 2020 increased the maximum number of members allowed in both SMSFs and small APRA funds from four to six from 1 July 2021.
According to the ATO, 69.2% of SMSFs had two members in June 2020, typically a married couple, followed by 23.7% with just a single member. Those with three or four members made up just 7% of funds. These numbers have been stable for many years, indicating there may not be much demand for five- or six-member funds.
How many SMSFs are there?
The latest available ATO figures indicate there were 597,900 SMSFs in Australia in June 2021. This resumed the steady growth of the sector after a brief dip in numbers during the early phase of market disruption due to COVID.
As you can see from the table below, the number of new funds established increased while wind-ups fell sharply in the year to June 2021 as markets rebounded strongly from their March 2020 lows. As a result, net establishments were the strongest in many years.
Number of SMSFs
| Year ended | Establishments | Windups | Net establishments | Total number of SMSFs | Total members of SMSFs |
|---|---|---|---|---|---|
| June 2021 | 25,312 | 2,187 | 23,125 | 597,900 | 1,114,529 |
| June 2020 | 21,723 | 15,856 | 5,867 | 574,775 | 1,071,788 |
| June 2019 | 20,427 | 13,544 | 6,833 | 581,231 | 1,090,467 |
| June 2018 | 25,381 | 23,927 | 1,454 | 574,348 | 1,076,982 |
| June 2017 | 30,352 | 14,508 | 15,844 | 572,894 | 1,079,734 |
| June 2016 | 32,810 | 13,385 | 19,425 | 557,050 | 1,049,544 |
| June 2015 | 33,743 | 13,600 | 20,143 | 537,625 | 1,017,776 |
Source: ATO
As at June 2021, the nearly 600,000 SMSFs in Australia had a combined total of 1.1 million members. Although this represents less than 5% of Australia’s population, they accounted for $822 billion in assets, or about 25% of the $3.3 trillion invested in superannuation. This is less than the $927 billion invested in industry funds, but more than the $748 billion in public sector funds and the $689 billion invested in retail funds run by financial institutions. Corporate funds accounted for another $61 billion.
What is the average and median SMSF balance?
The average account balance of individual SMSF members has been steadily increasing in recent years, as indicated in the first row of the table below. These are the latest figures available, but it’s worth noting that they don’t capture the strong rebound in markets in 2020–21.
As the average balance is skewed by a relatively small percentage of very high balance funds (see the following table showing the percentage of funds with various asset balances), the median balance in the second row of the table below is perhaps a more accurate reflection of the typical fund. While the median balance per member has also been growing steadily, it is less than two thirds of the average balance per member. Bearing in mind that the majority of SMSFs in Australia have two members, the average and median combined balance of SMSF fund members is provided in the third and fourth rows of the table. These are the latest figures available.
| 2019–20 | 2018–19 | 2017–18 | 2016–17 | 2015–16 | |
|---|---|---|---|---|---|
| Average assets per member | $695,757 | $690,656 | $657,543 | $627,471 | $577,159 |
| Median assets per member | $414,912 | $404,632 | $382,380 | $363,908 | $338,631 |
| Average assets per SMSF | $1,300,728 | $1,296,648 | $1,235,784 | $1,180,824 | $1,088,126 |
| Median assets per SMSF | $733,926 | $718,540 | $679,079 | $646,862 | $604,431 |
Source: ATO
The vast majority (86%) of SMSFs in Australia had balances greater than $200,000 in June 2020, as indicated in the table below. This is consistent with the generally held view that it is not cost effective to set up and run an SMSF with less than $200,000.
As our superannuation system matures, the percentage of funds with less than $200,000 is declining. At the other end of the scale, the ATO has only recently started providing figures for funds with $10 million to $20 million in assets, $20 million to $50 million and $50 million-plus.
| SMSF asset balance | Percentage of SMSFs |
|---|---|
| Under $50k | 4.9% |
| $50k – $100k | 2.7% |
| $100k – $200k | 6.6% |
| $200k – $500k | 22.3% |
| $500k – $1m | 25.8% |
| $1m – $2m | 20.7% |
| $2m – $10m | 2.8% |
| $10m – $20m | 0.7% |
| $20m – $50m | 0.1% |
| $50m+ | <0.1% |
Source: ATO
Age and gender of SMSF members
Perhaps surprisingly, the age of SMSF members is fairly evenly spread between the ages of 35 and 84, as indicated in the table below. Even more noteworthy is the increasing popularity of SMSFs among women. In fact, between the ages of 35 and 69, female members outnumber males. Overall though, 53% of SMSF members are men while 47% are women.
| Age bracket | Male % | Female % |
|---|---|---|
| Under 25 | 0.5 | 0.5 |
| 25–34 | 2.8 | 2.8 |
| 35–44 | 10.4 | 11.0 |
| 45–49 | 9.0 | 9.6 |
| 50–54 | 10.9 | 11.8 |
| 55–59 | 12.1 | 12.7 |
| 60–64 | 12.8 | 13.4 |
| 65–69 | 12.3 | 12.9 |
| 70–74 | 12.4 | 12.2 |
| 75–84 | 13.7 | 11.3 |
| 85+ | 3.1 | 1.9 |
| Total | 52.8% | 47.2% |
Source: ATO
SMSF trustee structures
According to the most recent statistics from the ATO, approximately 63% of all SMSFs have corporate trustees while 37% have individual trustees. A corporate structure is becoming increasingly popular. In 2019–20, 81% of new funds were set up with a corporate trustee.
SMSF phases
A majority of all the SMSFs in Australia (55%) were solely in the accumulation phase (that is, solely accepting contributions by or on behalf of members) in June 2019, while the remaining 45% of funds were either partially (10%) or fully (35%) in the retirement phase (formerly called the pension phase). This was a 2% increase in members wholly in retirement phase, as the baby boomer bubble gradually leave the workforce.
The bottom line
Self-managed super funds are now firmly entrenched in the Australian superannuation landscape. The number of SMSFs continues to rise despite the market uncertainty in recent years, along with individual member and overall fund balances. Most SMSFs have corporate trustees, with this structure becoming increasingly popular. SMSFs typically have two members, with more women getting on board. And an increasing number of funds are moving from accumulation phase to the retirement phase, as the system matures and Australia’s population ages.
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