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As of 2022, super fund members aged 65 or older, a good measure of retired individuals, already own 40% of Australia's $3.3 trillion in superannuation assets.
Currently retirees own about 26% of the money held with APRA-regulated funds, being not-for-profit and retail funds, while two-thirds of self-managed super fund assets are already owned by retirees.
Rainmaker Information's projections suggest that this ratio will climb to 55% by 2032 and potentially exceed 70% by 2042.
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“These estimates have far-reaching implications for the superannuation landscape and investment strategies,” said Alex Dunnin, executive director of research and compliance at Rainmaker Information.
“Understanding the shifting dynamics and increased ownership by retirees is crucial for devising effective investment strategies and ensuring the long-term sustainability of the superannuation system.”
“Some funds already have half of their assets owned by retirees. Furthermore, the retiree funds under management (FUM) ratio for APRA-regulated funds has increased by over one-third since 2015.
Retirees currently own approximately $625 billion in assets within APRA-regulated funds, while their ownership across all super funds amounts to a staggering $1.3 trillion.
If superannuation savings nearly double to $7 trillion over the next decade, APRA-regulated funds could hold $1.8 trillion in retiree assets alone, which is triple the current amount.
The total superannuation assets owned by retirees across all funds could reach $4 trillion.
“Not-for-profit (NFP) super funds, which have been increasingly dominant, are expected to extend their influence into retirement superannuation as well,” said Dunnin.
“This shift could significantly impact the retail superannuation segment, which has historically controlled a substantial share of this lucrative market.”
Furthermore, the analysis reveals that fund consolidation is already shaping the landscape, with the ten largest super funds currently controlling half of all retirement assets in APRA-regulated funds.
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