Context
In Day 2 of Dashboard Week, we will be going to analyze the relationship between membership and superannuation fund investments in Australia. By the end of financial year 2022, there are total 118 superannuation funds registered in Australia. The total lump sum payments made by these funds was $329 Million. Members received $49 Million who wanted to retire earlier whereas $280 Million was paid to members without conditions. So, what about the growth in members account. Upon comparing between financial year 2020 to 2022, there was an increasing trend in member’s account. In 2022 alone, the recorded growth was 36.3%.
Relationship between variables contributing fund’s investment
There are two major factors contributing to fund’s investment, namely, movement in members account including new member joining super fund or member withdrawing their membership. And other factor being total member accounts. When those categories were plotted against total investments. Nearly 61% of variance in total investments can be explained by net movement in member’s account. On the other hand, total members account formed 78% of total investments. This correlation is positive. Investment by super fund has a relationship with movement in members account and total member accounts.
Comparing net movement in members account with investment income
In order to further prove this relationship, let’s compare top 10 super funds with net movement in members account and their total investment income.
Line chart represents investment income and bar chart represents net member movement. In case of Australian Super, they have highest investment income, even though value of net movement is less compared to Australian Retirement Trust, the entity with who Q-Super merged with. This indicates the fact that, having higher number of net member movement does not necessarily influence the investment income. This could lead to another fact that Australian Super investment strategy must be really good, but we are not analyzing that in this blog.
Comparing member’s accounts with fund’s investment
If we look at the chart on the right, we can tell that there is a decreasing trend in fund’s investment followed with decreasing trend in total member accounts.
Conclusion
In summary we can say that with growing number of members, funds seem to invest more. Membership in superannuation fund is closely related to the investment of fund’s assets, as member’s contribution are invested to generate returns that will fund their retirement income.
Link to Tableau Public