cowsense,The way I see it there is two different scenarios. 1) A...

cowsense,

The way I see it there is two different scenarios.

1) A contribution from member to super fund, and

2) Super fund purchase of asset (from member)

In the first case a member may choose to contribute some cash (in which it is clear that the money is simply being transferred to the super fund and is registered as an addition to the member's contributions. This money is available to the fund to use in any way it chooses. Note that the member's equity (assets - liability) decrease by the value of the contribution whilst the super fund's equity increases by the value.

As an alternative to a cash transfer, the contribution may be made in the form of some other asset class, such as shares. The same arguments apply. The member's private equity decreases and the super fund's equity increases. The super fund is free to do whatever it wants with the contribution. The contribution and any subsequent investment decision (now that the super fund has more assets) are independent and not necessarily related.

In the second case the super fund is simply making an investment decision utilising spare cash it has to purchase some shares. Purchasing an asset from a member (or anyone else) does not immediately change the net equity position. The super fund cash position will decline, but other assets (eg shares) will increase. If the super fund decides to purchase some shares from a member then it's net equity does not change and the member's personal equity does not change (one asset class is simply exchanged for another).

Hope this makes some sense!