IBISWorld Market Research
A number of funds have merged to realise cost efficiencies and lower fee structures.
Melbourne, Australia (PRWEB) February 02, 2014
Australia's Superannuation Funds industry forms the backbone of the nation's envied pension system. Three pillars support Australia's pension system: a means-tested age pension, compulsory super contributions (i.e. the Superannuation Guarantee) and voluntary super contribution schemes. The Superannuation Guarantee requires employers to contribute funds equal to 9.25% of their employees' incomes to the employees' choice of super fund. According to IBISWorld industry analyst Andrei Ivanov, “this system has resulted in the Australian Superannuation Funds industry growing to become the fourth-largest private pension fund market in the world, with almost $1.6 trillion in assets as at June 2013.”
Although the financial crisis stripped much of the industry's investment income, investment income rebounded in 2009-10 to offset the losses. However, revenue has remained at the mercy of the markets over the six years through 2013-14. During this period, industry revenue is forecast to grow by an annualised 44.6% to reach $344.7 billion. “The high revenue growth rate is almost entirely attributable to the volatility of the financial markets,” says Ivanov. Industry revenue is forecast to grow by 46.6% in 2013-14. The industry is characterised by low concentration.
Looking past the significant pull that financial markets have on superannuation, other important developments are evident in the Superannuation Funds industry. While the value of superannuation savings is rising, significant regulatory changes have caused the number of major super funds (i.e. those with five or more members) to fall to 305 in 2013-14. A number of funds have merged to realise cost efficiencies and lower fee structures. Meanwhile, the number of self-managed super funds has surged to 544,968 in 2013-14 as more people decide to take control of their retirement savings.
For more information, visit IBISWorld’s Superannuation Funds report in Australia industry page.
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IBISWorld industry Report Key Topics
The Superannuation Funds industry provides retirement benefits to members and includes both large and small funds. Industry revenue is contributions and net investment revenue combined. Investment revenue is income earned from investments and capital gains or losses. Enterprises represent the major funds (i.e. super funds with five or more members), while establishments include all super funds.
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