Big bounce in discretionary super payments

Households lifted their voluntary superannuation contributions for the first time in more than a year during the December quarter, pouring $3.6 billion into their retirement savings.

As global sharemarkets took off in the last three months of 2012, the total value of funds flowing into superannuation was $21.6 billion, an increase of 10 per cent from the much weaker September quarter, figures from the Financial Services Council show.

Of this increase, $3.6 billion came from voluntary contributions by members - up 13 per cent on a year earlier.

FSC chief economist James Bond, who prepared the analysis using figures from the financial regulator, said this was the first time members' discretionary contributions into super had increased since September 2011.

Mr Bond said the bounce was probably a result of higher confidence among households and a run of better performance on financial markets.

"We had growth in equities last year and we had a year of good returns for superannuation funds. Combined with an absence of bad news from Europe and the US, this appears to have given people more confidence."

The typical super fund posted an 11.7 per cent gain last calendar year and the growth continued with a further 2.6 per cent rise in January, according to figures from SuperRatings.

The rise in voluntary contributions comes after $117.5 billion was poured into super in 2011-12, the second-highest yearly inflow on record.

However, the latest increase is significant because until now, the rebound has been driven by employer contributions, which are mostly mandatory, rather than households voluntarily putting more into super.

Despite the quarterly bounce, over the year voluntary contributions fell slightly and Mr Bond said market conditions were too fragile to predict a sustained rise in super contributions.

While the rise is welcome news for the funds management industry, which has been squeezed by greater caution among consumers, Mr Bond also said the growth was still much slower than before the global financial crisis.

Mr Bond's analysis is based on figures on the $1.4 trillion superannuation industry provided by the Australian Prudential Regulation Authority.