Spike in LRBAs a result of ATO change to statistics

Changes to how the ATO reports statistics for SMSF Limited Recourse Borrowing Arrangements has resulted in a dramatic increase in the 2013/14 figures. However this really reflects a underlying trend, instead of a actual spike in LRBAs.

These statistics are contained in the ATO Self-managed super fund statistical report – June 2014, which includes details of the June 2014 quarter, along with new details of the 2012/13 financial year.

Changes to reporting of LRBAs

In the June 2014 statistics the ATO has made changes to the reporting of Limited Recourse Borrowing Arrangements (LRBAs), resulting in the marked jump as seen in the graph below. This means that the statistics going forward will be more reliable, but longer term comparisons are not accurate. The changes resulted in a revision to earlier figures, raising the LRBAs from “$2.6 billion in 2013 to $8.3 billion,” according to the ATO.

SMSF Limited Recourse Borrowing Arrangements LRBAs 2009-2014

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Over 75% satisfied with SMSF investment performance

Roy Morgan Research has found that members are much happier with the performance of SMSFs than industry and retail funds. 75.6% of members are satisfied with the investment performance of their SMSF, as compared to 55.8% for industry funds and 53.7% for retail funds. Across all funds 55.1% of members were satisfied with the investment performance of their super fund in May 2014, compared to 47.9% one year earlier. The research report, Superannuation Satisfaction Report –  prepared by Roy Morgan Research, is compiled from more than 30,000 interviews per year.

Norman Morris, Industry Communications Director for Roy Morgan Research, says:

“With the expansion of the SMSF sector, satisfaction with financial performance is increasingly a factor that fund managers should be taking notice of. It appears that satisfaction with superannuation has a lot to do with the amount in super and the consequential level of engagement”.

Super Fund Investment Performance Satisfaction

Fund TypeMay 2013May 2014Change
Industry Funds49.4%55.8%+6.4%
Retail Funds44.6%53.7%+9.1%

Superannuation member satisfaction with investment performance - SMSFs, retail funds, industry funds.

 Source: Roy Morgan Research

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ATO SMSF Annual Return Statistics 2012

The ATO has released statistics compiled from the 2011/12 tax returns, including for SMSFs:

“Taxation statistics 2011–12 is a report presenting an overview of the different taxes administered by the ATO, as well as a look at the important role the ATO plays in superannuation. In these statistics, we look at the income tax returns for the 2011–12 income year and other information provided to us, such as goods and services tax and business activity statements, relating to the 2012–13 financial year.”

There appears to be a clear trend for increasing Concessional contributions, with a sharp increase leading up to the GFC and subsequent drop:

Total SMSF Concessional Contributions Received

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