6360.0 - Superannuation: Coverage and Financial Characteristics, Australia, Jun 2000
ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 17/09/2001
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APPENDIX - SUPERANNUATION INFORMATION & DATA QUALITY
DATA QUALITY AND INTERPRETATION OF RESULTS Benefit structure The benefit structure of a fund describes the way in which members' benefits are determined. In the SEAS, the name of the fund as reported by the respondent was used to code the benefit structure as either an 'accumulation fund' or 'defined benefit or hybrid fund' (see the Glossary for definitions of these terms). In the initial coding process the benefit structure could not be determined for 16% of accounts. It was considered likely that many of these accounts belonged to accumulation funds, because most defined benefit or hybrid funds are large and easily identified public sector funds. Analysis confirmed that respondents with 'not determined' accounts were very similar to those with accumulation accounts and on this basis all accounts where the benefit structure was initially 'not determined' were coded as 'accumulation funds'. The resulting percentage of accumulation accounts to total accounts was compared with the corresponding figure published in Superannuation Trends, March Quarter 2000 by the Australian Prudential Regulation Authority (APRA). The proportion obtained from SEAS was 82% compared with 86% published by APRA. Employer or business contributions Employer or business contributions were regular or irregular payments, including salary sacrifice payments, made to a respondent's superannuation account by their employer or business. Employer or business contributions were only obtained for accumulation accounts as the value of employers' contributions to defined benefit or hybrid account holders is not always allocated to the individual account until the benefit is paid. Personal contributions Personal contributions were regular or irregular after-tax payments made by respondents to their own superannuation. For owner managers of unincorporated enterprises the distinction between personal and business contributions may not always be clear-cut and in these cases it was left to the respondents to nominate whether the contributions were personal or business. Weekly contribution rates Total reported contribution amounts were converted to a weekly rate by dividing the total contribution amount by the contribution period in weeks. In some cases where the total contribution amount was reported from a statement or provided by the fund, the contribution amount could not be converted to a weekly rate because the contribution period in weeks was not known. This occurred more often for contributions that had been made for less than two years. It was therefore decided to publish weekly rates of contribution only for those persons whose contributions had been made for two years or more. Account balance, withdrawal or resignation benefit and total balance In the SEAS, 'account balance' was collected as a measure of the amount of superannuation accrued in accumulation funds, while 'withdrawal or resignation benefit' was collected as a proxy for the present value of the superannuation benefit allocated to a person in a defined benefit or hybrid fund. In many cases withdrawal or resignation benefit values will understate a person's full benefit entitlement because the withdrawal or resignation benefit will exclude provisions for superannuation liabilities that are not contributed to the individual's accounts. The total superannuation balance for a person was obtained by adding the account balance and withdrawal or resignation benefit amounts for their three main superannuation accounts. Age of the data Most information from statements or provided by superannuation funds related to the period July 1998 to June 1999 or later. However, some respondents and funds referred to information that was older than July 1998. Information about contributions was only accepted if it related to a period from July 1997 onwards, while information about account balances was accepted if it related to 30 June 1998 or later. Adjustment to respondent estimates Some respondents provided an estimate for certain items as well as providing statements or consent for their superannuation fund to provide information. Where information was available from more than one source, information sourced from the fund or other documents was used to assess the quality of respondent estimates. For some demographic groups a consistent relationship was found between respondents' estimates and the values provided from statements or by superannuation funds. Patterns of underestimating or overestimating contributions, account balances or withdrawal/resignation benefits were identified. For those groups where there was a consistent relationship between the values, all respondent estimates were adjusted to bring them closer to the documented value. Where there was not a consistent relationship, the respondent estimates were set to 'missing values' (see below for treatment of missing values). A2 AVERAGE ADJUSTMENT FACTORS APPLIED TO RESPONDENT ESTIMATES
Extreme contribution rates Some respondents reported very high rates of contribution. A number of factors may validly cause high contribution rates, including: contributions being made by irregular payments; a rollover amount from a previous fund being called a contribution; salary sacrificing; and a large one-off payment being invested in superannuation. No corrections were made to these data except in cases where errors were clearly identified. Missing values and their effects on published medians Where a contribution or account balance was not able to be determined for a respondent or income unit, the value of that contribution or balance is missing. If the missing values are significantly different from the known values, and the percentage of missing values is high, then the exclusion of missing values may bias the calculated medians shown in this publication. The percentage of values which were missing for each of the contributions and superannuation balance items is given in the table below. The characteristics of respondents (or income units) with missing values were compared with those of respondents (or income units) with known values. Some types of respondents were more likely to have missing values. Tables A3 and A4 summarise the results of this analysis. A3 ANALYSIS OF RESPONDENTS WITH MISSING VALUES
A4 ANALYSIS OF INCOME UNITS WITH MISSING VALUES
Comparison with National Accounts While the superannuation balance information reported in SEAS relates to periods from June 1998 to about September 2000, the information is centred between the June and September quarters 1999. The total value of the life insurance and superannuation assets of Australian households recorded in the national accounts was $539 billion at 30 June 1999 and $548 billion at 30 September 1999, with these two measures averaging $544 billion (see Australian National Accounts: Financial Accounts, March Quarter 2001, (Cat. no. 5232.0) for details). However, these measures include some small amounts that relate to life insurance products, such as term insurance, that are not superannuation products and are out of scope of SEAS. Comparing the national accounts information with data published by Australian Prudential Regulation Authority (APRA) as at 30 June 1999 suggests that up to $17 billion of the national accounts aggregate might be excluded from a measure of superannuation. For simplicity, the SEAS data are therefore compared in the table below with the 30 June 1999 national accounts measures as the best practical comparison of the coverage of superannuation assets achieved in SEAS. The SEAS identified a total of $268 billion in superannuation balances held by pre-retired persons. This amount is measured as the superannuation balances reported in the account statements provided to superannuation members. These balances are the sum of amounts in accumulation funds and the withdrawal or resignation benefits in defined benefit and hybrid funds. The reasons for the difference between SEAS and the national accounts measures include:
Scope differences exclude the superannuation assets of the following people from SEAS superannuation balance information:
Coverage differences are partly because only the top three account balances were reported for each person in SEAS. These balances covered 92% of the number of balances held by SEAS respondents, and a higher (but unknown) proportion of the value of all their balances. This aspect of coverage is unlikely to account for more than $10 billion of the difference between the SEAS measure and total household superannuation assets. The SEAS superannuation account balance information for accumulation accounts is $173 billion, compared with an estimate of $207 billion published by APRA as at end June 1999 (and about $8 billion higher as at end September 1999). Non-response of 16% accounts for most of the difference and the remaining difference of about $10 billion is likely to be explained by a combination of the scope differences and the SEAS limit to reporting only the top three balances. Much larger coverage differences arise in relation to the defined benefit and hybrid accounts. SEAS identifies total superannuation balances of $92 billion in these accounts, whereas the national accounts measure incorporates a total amount of $332 billion. Much of the unfunded superannuation liabilities of the general government sector are not reported as balances on individual members' statements, and are therefore not reported in SEAS. At 30 June 1999, households held unfunded superannuation asset claims on the general government sector of $113 billion. Perhaps most of the Commonwealth government unfunded liabilities ($64 billion) are not reported in SEAS, and a proportion of the State and local government liabilities ($50 billion) are not reported, together accounting for perhaps $85 billion or so of the coverage difference between SEAS and the national accounts measure. In addition, some of the employer-funded superannuation liabilities of private sector defined benefit and hybrid funds are not attributed to individual members' accounts until paid. The following tables summarise the relationship between the SEAS and the national accounts measure of superannuation assets, based upon the broad approximations of the likely amounts associated with the scope and coverage differences. A5 NATIONAL ACCOUNTS INFORMATION (a)
(b) While this item includes some insurance assets that out of scope for superannuation statistics, this overstatement is expected to be approximately offset by choosing a balance date earlier than the centred estimate from SEAS. A6 RECONCILIATION OF SEAS AND NATIONAL ACCOUNTS DATA
(b) Residual is calculated from the total life and superannuation assets sourced from the national accounts, less SEAS superannuation balances and adjustments. It is expected to be largely the funded superannuation liabilities in defined and hybrid funds that are not allocated to individual account balances reported in SEAS. While only about 50% of the total value of household superannuation assets is captured in SEAS, most of the population of households and individuals with superannuation is covered by SEAS reporting, with a range of information presented on superannuation coverage and financial characteristics for both retired people and those for which balance information was not available, as well as for those whose total superannuation assets exceed the balance details obtained in SEAS. Therefore, analysis can be undertaken on: the differences between those groups that have superannuation and those that do not; the current level and source of superannuation contributions; and the reasons people do not currently make superannuation contributions. However, care needs to be exercised in analysing the superannuation balance information in this publication, particularly in regard to assessing the adequacy of superannuation coverage in the community. Document Selection These documents will be presented in a new window.
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