Behind Super’s Multi-Trillion-Dollar Milestone

By Robin Bowerman | More Articles by Robin Bowerman

Australia’s superannuation system has passed a new milestone, reaching $2 trillion-plus in total assets.

The recently-released superannuation statistical report for the March quarter (PDF), published by the Australian Prudential Regulation Authority (APRA), shows that superannuation assets exceeded the symbolic double-trillion-dollar mark in the first three months of this year.

This milestone certainly underlines that superannuation is such a critical plank of our retirement incomes system. However, it should be emphasised that the headline-grabbing $2 trillion figure has to stretch a long way between many millions of super fund members.

The reality is that average super balances remain modest – particularly given the growing longevity of our rapidly ageing population and the estimated costs of financing a "comfortable" retirement lifestyle.

The most recent Superannuation Market Projections report, published late last year by Rice Warner Actuaries, gives a valuable insight into average balances and into how far those super dollars have to stretch.

Rice Warner estimated that as at June 2014 – when total super assets stood at $1.8 trillion – the average balances, based on the number of super accounts, were: industry funds $33,900, employer master trusts $30,000, personal funds $52,200, public-sector funds $88,400 (excluding unfunded public-sector liabilities), corporate funds $142,200, and self-managed funds $553,300.

Keep in mind that this report calculates that the average balance for all types of super funds would be about 40 per cent higher if all members consolidated all of their super accounts. Multiple super accounts are particularly prevalent among younger members of bigger funds who may have moved from job to job, picking up more super accounts along the way.

Further, the higher average balance in SMSFs should be kept in context.

One of the key points of difference between types of super funds and their average balances concerns member demographics. Rice Warner researchers estimate that SMSFs hold 54.5 per cent of overall superannuation assets invested in retirement products (including transition-to-retirement pensions) – compared to 30.7 per cent for commercial super funds and just 2.5 per cent for industry funds.

As this research shows, average balances for all types of super funds, not surprisingly, increase with age throughout the members’ working lives, reaching a peak at 60-64 years of age when payouts of retirement pensions and lump sums progressively reduce average balances as members grow older.

Another point to emphasise with SMSFs is that their trustees have been motivated to setup their own funds and it is logical that their clear interest in super will lead to higher average balances.

With super passing its multi-trillion-dollar milestone, it is useful to look behind the headlines dollars. Next stop: $3 trillion – it may come soon than you think.


Robin Bowerman is Head of Market Strategy and Communication, Vanguard Australia.

As a renowned market commentator and editor Robin has spent more than two decades writing about all things investment.


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Robin Bowerman

About Robin Bowerman

Robin Bowerman is Head of Market Strategy and Communication, Vanguard Australia. As a renowned market commentator and editor Robin has spent more than two decades writing about all things investment.

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