The Superannuation Industry in Australia

Abstract

Fueled by government policy and legislative action, the superannuation (pension) industry in Australia has grown rapidly over the past decade. With superannuation firmly entrenched as part of employee wage and salary packages, and with Government-mandated increasing rates of employer and employee contributions over the coming years, the significance of the industry for both individual workers and the entire economy is hard to over-estimate. As public and private savings rates have declined, and as government policy makers have become increasingly aware of the looming demographic crisis (the enormous increase in aged dependents to working population) in the early years of the 21st Century, the superannuation industry is now an essential component of the Australian government agenda for the nation's economic and social future. The purpose of this paper is to examine the current position of the industry and its possible future directions. In doing so, we believe that any assessment of the potential role of superannuation funds in national development over the coming decades must be sensitive to the structure and current organization of the industry. Thus, the goals of the paper are three-fold: first, to provide a reference source on current government and industry information regarding the structure of the industry. Second, to identify crucial trends relevant to the performance of the industry. A third goal is to provide summary industry estimates of the future size and structure of the industry. The paper also provides a commentary on past and recent federal government policy initiatives.