The aftermath of the financial crisis is causing wild fluctuations in industry revenue
Melbourne, Australia (PRWEB) December 03, 2013
Industry super funds are not-for profit superannuation funds that operate for the benefit of their members. They are one of five types of superannuation fund in Australia. According to IBISWorld industry analyst Andrei Ivanov, “industry super funds were hit hard by the financial crisis, reporting an aggregate loss in 2008-09.” The lost ground has since been recovered, with industry assets forecast to grow at annualised 9.8% over the five years through 2013-14. However, the aftermath of the financial crisis is still evident, with waves of uncertainty rocking financial markets and causing wild fluctuations in industry revenue. In 2013-14, revenue for the Industry Superannuation Funds industry is forecast to grow by 35.8% to $70.7 billion.
Industry super funds previously enjoyed low competition due to having lower fees than other super funds. However, they are now being forced to think outside the box. “This is due to increasing pressure from self-managed and retail super funds”, says Ivanov. Higher regulation, as part of the Stronger Super reforms, is causing retail super funds to reduce their fees. As the fee deferential between industry super funds and retail super funds disappears, industry super funds are losing their competitive advantage. The industry is characterised by a medium level of concentration, with the five largest players – AustralianSuper, UniSuper, Retail Employees Superannuation Trust, Health Employees Superannuation Trust Australia and Sunsuper Superannuation Fund – accounting for a significant share of industry revenue.
The next five years will present several challenges for the Industry Superannuation Funds industry with the ever-growing pool of assets in superannuation. Industry super funds are expected to consolidate as they attempt to compete with retail and self-managed super funds. The portion of industry funds that are open to the general public is anticipated to increase. Members of industry super funds will become more aware of their retirement strategies and demand more investment options and flexibility.
For more information, visit IBISWorld’s Industry Superannuation Funds report in Australia industry page.
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IBISWorld Industry Report Key Topics
Firms in this industry primarily provide retirement benefits to members of specific industries. Industry revenue is contributions and net investment revenue combined. These firms must have more than four members.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
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