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1301.0 - Year Book Australia, 2003  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 24/01/2003   
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Contents >> Financial System >> Pension funds

Pension funds have been established to provide retirement benefits for their members. Members make contributions during their employment and receive the benefits of this form of saving in retirement. In order to receive concessional taxation treatment, a pension fund must elect to be regulated under the Superannuation Industry (Supervision) Act 1993 (Cwlth) (SIS Act). These funds are supervised by either APRA or the ATO. Public sector funds, being funds sponsored by a government employer or government controlled business enterprise, are exempt from direct APRA supervision.

The largest number of pension funds comprise self-managed superannuation funds (also known as 'do it yourself' funds). From 1 July 2000 the ATO assumed responsibility for regulating self-managed superannuation funds.

Self-managed superannuation funds are superannuation funds:

  • that have less than five members and
  • each individual trustee of the fund is a fund member and
  • each member of the fund is a trustee and
  • no member of the fund is an employee of another member of a fund, unless they are related and
  • if the trustee of the fund is a body corporate each director of the body corporate is a member of the fund.

Corporate funds are funds sponsored by a single non-government employer, or group of employers. Industry funds generally have closed memberships restricted to the employees of a particular industry and are established under an agreement between the parties to an industrial award.

Public sector funds are those funds sponsored by a public sector employer. Retail funds are pooled superannuation products sold through an intermediary to the general public. Funds with less than five members but which do not qualify as self-managed superannuation funds are known as small APRA funds.

In addition to separately constituted funds, the SIS Act also provides for special accounts operated by financial institutions earmarked for superannuation contributions, known as Retirement Savings Accounts, that also qualify for concessional taxation under the supervision of APRA. The liabilities represented by these accounts are liabilities of the institutions concerned and are included with the relevant institution in this chapter (e.g. retirement savings accounts operated by banks are included in bank deposits in table 26.4), but are also footnoted in table 26.8 for completeness.

The number of pension funds is shown in table 26.7. The assets of pension funds are shown in table 26.8 and include unfunded pension claims by pension funds on the Commonwealth Government where these have been formally recognised in accounting systems. The assets in the table do not include any provision for the pension liabilities of Australian governments to public sector employees in respect of unfunded retirement benefits. At 30 June 2002 the ABS estimate for claims by households on government for these outstanding liabilities was $121.1b.


26.7 PENSION FUNDS(a) - 30 June 2002

Type of fund
no.

Corporate
3,235
Industry
139
Public sector
94
Retail
274
Small APRA funds
(a)8,100
Self-managed superannuation funds
(a)214,700
Total
(a)226,500

(a) Approximate number, June 2002 not yet available.

Source: APRA and ATO.


26.8 PENSION FUNDS(a), Financial assets

Amounts outstanding at 30 June

2000
2001
2002
$m
$m
$m

Currency and deposits
28,907
36,422
33,784
Bills of exchange
6,193
6,399
6,003
One name paper
13,473
11,813
12,388
Bonds
36,476
35,954
39,346
Loans and placements
14,522
15,977
14,400
Equities
205,930
225,476
218,887
Unfunded superannuation claims
8,013
6,329
5,879
Net equity of pension funds in life office reserves
108,079
116,070
117,729
Other accounts receivable
3,671
4,611
4,939
Total
425,264
459,051
453,355

(a) Retirement savings accounts were valued at $404m at 30 June 2001 (APRA).

Source: Australian National Accounts: Financial Accounts (5232.0).


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