Australia’s superannuation market is the fastest growing among other major pension systems around the world, according to a new report.
Australia’s superannuation assets grew 12.1 per cent per annum over the last 20 years, faster than any other country with an established pension system, underpinned by compulsory contributions, higher growth asset allocations and general strength in investment markets, according to the 2018 Global Pension Asset Study.
The research also showed that Australian superannuation assets grew by 7.1 per cent per annum over the last decade.
The ratio of super assets to GDP now stands at 138 per cent; up from 126 per cent in 2016, and an increase of 24 per cent in the last 10 years.
Paul Newfield, a senior investment consultant at Willis Towers Watson, which commissioned the research, said the findings were encouraging for Australian retirees.
“Australia continues to be among the world leaders and punch well above its weight in terms of assets in the system and continued growth rate of these assets,” Mr Newfield said.
“Pension assets in Australia also continue to rise as a percentage of GDP and the pension system continues to influence the political agenda, and the size and significance of the system is likely to see this trend continue.”
While the overall outlook was good, Mr Newfield also pointed to the challenges ahead as pension systems struggle to cope with ageing populations.
“Challenges that lie ahead for funds worldwide include the need for countries with ageing populations to accommodate increased benefit payments and to see how countries can deliver better retirement outcomes and opportunities for members,” Mr Newfield said.
What do you think of Australia’s superannuation system? Are you worried about the Government making changes that will damage the performance of superannuation funds?