The retirement savings of Australians will soon become the second largest globally – rising from fourth now to surpass the British and Canadian systems within the next decade, new research from the Super Members Council shows.
Super Members Council analysis projects Australian pension assets will surpass the UK in 2030 and Canada by 2031, to rise to second in the world - with the US remaining the largest.
The growth of the Australian super system has helped millions of everyday Australians reach a more financially secure future.
The sector’s rising global investment capability also gives Australia stronger global clout, as a delegation of super leaders head to the US to search for new investment deals for members while strengthening ties.
Back home, the rising super balances of millions of Australians are reducing government spending on the Age Pension, taking pressure off all taxpayers.
Super Members Council CEO Misha Schubert said Australia’s super system is the envy of the world.
“Australia has the fastest growing super system globally – twice the rate of international peers,” she said.
“We’re the only OECD country where spending on government-funded pension payments is falling and will continue to fall.”
“Super is a great Australian success story. It gives millions of everyday Australians the chance to live the life they want in retirement, while saving the Budget money over the long-term. It’s a win-win.”
“Importantly, the system settings – automatic super payments, near universal coverage and preservation of savings have helped Australians set aside world leading retirement nest eggs.”
The SMC analysis shows:
- Between 2001–2023, Australia’s cumulative contribution inflows reached 180% of GDP, the highest among OECD countries and well above the OECD average level.
- Australia is the only OECD country whose spending on its Age Pension system is projected to fall, dropping from 2.5% of GDP currently to 2.0% by 2060*. The average proportion of GDP spend on pensions across the OECD is 9.3%.
- The proportion of Australians receiving the full age pension is projected to halve from 44% today to 21% in 2062-63.
- Australia has the 55th highest population but the fourth largest pool of pension assets – currently behind the UK, Canada and the US.
Funds under management in Australia are currently $4.1 trillion, exceeding any single Sovereign Wealth Fund including Norway ($2.8 trillion) and China ($2.1 trillion).
The scale of Australia’s international investment pool has also strengthened Australia’s global influence and security by deepening our economic and trade links with key global players.
A delegation of Australian super funds are currently in the US looking for new investment opportunities to further grow Australians’ super savings. They will join Australia’s Ambassador to the United States of America, the Hon Dr Kevin Rudd AC, and Australia’s Consul-General in New York, Heather Ridout AO, in Washington DC and New York at the Superannuation Investment Summit.
Having one of the largest reliable pools of long-term stable capital creates new opportunities for investments to deliver strong returns for the retirement nest eggs of Australians.
Through super, millions of Australian workers own a profit-slice of world-leading publicly listed companies, toll roads, data centres, shopping centres, and renewable energy projects.
The success of Australia’s super system highlights the effectiveness of its system settings.
The compulsory and universal nature of Australia’s system, combined with strong preservation rules, have given Australia’s system the strongest net cashflow position globally, with around $3.14 billion in contributions invested each week.
“Three key policy settings have made Australia’s super system one of the biggest and most effective internationally and underpin its long-term success,” Ms Schubert said.
“Because super is universal, compulsory, and preserved until our retirements, total system contributions are projected to reach $141 billion for the financial year 2024-25.”
“These safeguards – especially that people’s investments are preserved until retirement – are the secret sauce of super, giving Australians in their millions the power of compound returns over decades.”
Figure 1: Australian superannuation system is projected to be the second largest globally within the next decade
Source: OECD Global Pension Statistics 2024, APRA Annual Superannuation Bulletin, June 2024, SMC Analysis
* Retirement Income Review
The opinions above are those of the author in their capacity as spokesperson for Super Members Council of Australia (SMC). SMC, the authors and all other persons involved in the preparation of this information are thereby not giving legal, financial or professional advice for individual persons or organisations.
About us:
We are a strong voice advocating for more than 11 million Australians who have over $1.5 trillion in retirement savings in profit-to-member superannuation funds. We protect and advance the interests of super fund members throughout their lives, advocating on their behalf to ensure superannuation policy is stable, effective, and equitable. We produce rigorous data and analysis to inform public policy discussions to strengthen retirement for millions of everyday Australians.
Contact details:
James Dowling: 0429 437 851, jdowling@smcaustralia.com