HOW BIG IS SUPERANNUATION IN AUSTRALIA?

Australia's superannuation industry manages $2.0 trillion making it 30% larger than Australia's GDP at June 2016 and among the largest superannuation savings pools in the world. To help students, researchers and interested observers better understand the role superannuation plays in the Australian economy SelectingSuper and its research partner Rainmaker Information has compiled some figures that we believe will help people grasp how big the industry is.

Key points

Australia's superannuation savings pool at end June 2016 amounted to $2.0 trillion.
Not-for-profit super funds hold about 43% of this money, retail funds hold 27% and the self managed super fund segment holds 30%. But while SMSFs hold 30% of the assets, they represent only about 8% of super fund members.
There are about 29 million separate super fund accounts in Australia held by approximately 12 million members, meaning Australians on average are members of 2 funds.

Australia's superannuation system at end June 2016 had $2.0 trillion in assets, representing about $167,000 per member or about $71,000 per account noting that many Australians are members of more than one fund.

Australia's superannuation savings pool is already 130% the size of the Australian economy as represented by GDP which at end June 2016 was an estimated $1.5 trillion.

At current growth rates that sees the superannuation savings pool grow in most years by 8-10% pa compared to GDP which grows most years by 2-3% pa, by 2036 it is reasonable to expect Australia to have accumulated $8 trillion in superannuation savings which by then will be more than twice the size of Australia's $3 trillion economy.

This massive amount of money being available for investment means Australia's superannuation system is one the nation's most important economic achievements and one of Australia's best international comparative advantages.

But with this massive market size that is already the 4th largest superannuation savings pool in the world (note that Australia's economy ranks only the 14th biggest), comes the huge responsibility of ensuring these assets are invested appropriately, that the market is properly regulated and super fund members' interests are protected, and that the industry operates honestly and efficiently.

Rainmaker in 2016 estimated that total fees paid by fund members amounts to $25 billion, which is almost as much as Australia spends on its total national military defence program.

Table:   Australia's superannuation market, 2016

    Assets $Billion        
Segment Sub-segment Jun 2015 Jun 2016 Change   Accounts# Funds*
Not-for-profit Corporate 54 55 2%   341,000 31
  Government 351 356 1%   3,533,,000 41
  Industry 434 466 7%   11,118,000 41
  Subtotal 839 877 5%   14,992,000 113
               
Retail Master trusts 409 399 -2%      
  Legacy retail 70 91 30%      
  RSAs 2 2 nil      
  Bal Stat Funds 56 53 -5%      
  Subtotal 537 545 1%   12,978,000 139
               
Small funds SMSFs 603 623 3%   1,088,000  
  SAFs/SADFs 2 2 nil   4,000  
  Subtotal 605 625 3%   1,092,000 577,248
               
TOTAL   1,981 2,047 3%   29,062,000 577,500

Source: Rainmaker Information and APRA

# Accounts refer to separate accounts members may have, noting a member may have accounts with several super funds.
* Funds refers to legal entities regulated by APRA or the ATO, noting that a 'fund' is not the same as a 'product', eg, a wealth group may offer several superannuation products into the market although in legal terms they are housed within a single regulated fund.

For more information, please contact Rainmaker.

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