Retirement
Superannuation tipped to crack $10 trillion
Superannuation funds will be the dominant shareholder in the ASX, rising to 60 per cent of the market in 2038, new modelling has suggested.
Superannuation tipped to crack $10 trillion
Superannuation funds will be the dominant shareholder in the ASX, rising to 60 per cent of the market in 2038, new modelling has suggested.
Deloitte’s Dynamics of the Australian Superannuation System showed continuing growth despite historically low cash rate and weak inflation.
Total superannuation assets rose from $2 trillion at 30 June 2015 to $2.7 trillion at 30 June 2018.
Deloitte’s modelling predicts that Australia’s total superannuation will increase over the next 10 years to $10.2 trillion by 2038, equating for a rise in compulsory superannuation to 12 per cent by July 2025.
Diane Somerville, author and principal of Deloitte Actuaries and Consultants, said: “In spite of short-term volatility, funds have consistently earned robust returns over the medium term, ensuring average balances at retirement have increased.”
“An important caveat to the projected 275 per cent growth in total superannuation assets to $10.2 trillion is that the current low interest rate environment that has continued to prevail both in Australia and globally for more than five years is likely to remain the ‘new normal’.”
Deloitte Superannuation lead partner Russell Mason noted that currently the total investment by superannuation funds in Australian shares comprises around 35 per cent of the total market capitalisation of the ASX.
“If they retain the same percentage allocation, this will increase to more than 60 per cent by 2038 – almost double the current allocation – and so dominate the ASX’s holdings,” he said.
The report also showed that post-retirement assets are also expected to grow despite members beginning to draw down their accumulated superannuation savings over time.
“However, given that there are no maximum constraints on the pace of members drawing down their benefits in retirement, if retirees are forced to draw down their retirement savings more quickly than expected in a low return environment, the projected asset growth to more than $10 trillion by 2038 would slow,” Mr Mason concluded.
About the author
About the author
Superannuation
Australia slips in global pension index
The Australian superannuation system has been rated at B, falling to fourth place, new research has revealed. ...Read more
Superannuation
Early super payments slow to under $200m
Less than $200 million was paid out of the super system in the second week of October, as the popularity of the government’s early release scheme looks to be slowing further following the release of...Read more
Superannuation
‘Impressive’ super erases most COVID-19 losses
Australian superannuation has erased most of the COVID-19 downturn following a positive September quarter, new research has shown. ...Read more
Superannuation
1.2m Australians lose in tax offset lag
The Treasury’s latest tax cuts will see more than 1.2 million low-income earners paying a higher rate of tax on their superannuation contributions, with funds arguing changing the tax rate could add...Read more
Superannuation
Could you be stuck in a poor-performing fund?
The government’s superannuation reforms to eliminate multiple superannuation accounts could have unintended consequences, with older Australians locked into financial decisions made by their teenage...Read more
Superannuation
Big super pushes for gender parity
One of Australia’s largest superannuation funds has launched an investor-led initiative that will see women fill at least 40 per cent of the executive roles in the ASX 200 over the next decade. ...Read more
Superannuation
Why it is ‘cruel’ and ‘embarrassing’ not to raise the SG
Australian workers, who are bearing the brunt of the public decision to shut down the economy, could be “cruelly rewarded” for their sacrifice with a less dignified retirement, industry experts ...Read more
Superannuation
A short-term fix: Lack of strategy behind super withdrawals
A large proportion of Australians who have withdrawn their super early as a result of financial hardship have not even stopped to consider how it will impact their savings at retirement. ...Read more
Superannuation
Australia slips in global pension index
The Australian superannuation system has been rated at B, falling to fourth place, new research has revealed. ...Read more
Superannuation
Early super payments slow to under $200m
Less than $200 million was paid out of the super system in the second week of October, as the popularity of the government’s early release scheme looks to be slowing further following the release of...Read more
Superannuation
‘Impressive’ super erases most COVID-19 losses
Australian superannuation has erased most of the COVID-19 downturn following a positive September quarter, new research has shown. ...Read more
Superannuation
1.2m Australians lose in tax offset lag
The Treasury’s latest tax cuts will see more than 1.2 million low-income earners paying a higher rate of tax on their superannuation contributions, with funds arguing changing the tax rate could add...Read more
Superannuation
Could you be stuck in a poor-performing fund?
The government’s superannuation reforms to eliminate multiple superannuation accounts could have unintended consequences, with older Australians locked into financial decisions made by their teenage...Read more
Superannuation
Big super pushes for gender parity
One of Australia’s largest superannuation funds has launched an investor-led initiative that will see women fill at least 40 per cent of the executive roles in the ASX 200 over the next decade. ...Read more
Superannuation
Why it is ‘cruel’ and ‘embarrassing’ not to raise the SG
Australian workers, who are bearing the brunt of the public decision to shut down the economy, could be “cruelly rewarded” for their sacrifice with a less dignified retirement, industry experts ...Read more
Superannuation
A short-term fix: Lack of strategy behind super withdrawals
A large proportion of Australians who have withdrawn their super early as a result of financial hardship have not even stopped to consider how it will impact their savings at retirement. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
