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Aggregate flows and superannuation assets to 2040-41 (real dollars and percent of GDP)

RIMGROUP estimates of net flows into and out of Australian superannuation in real 2007-08 dollars are shown in Chart 30 below. The inflows are concessional, non-concessional and Government Co-Contributions less taxes in each year. The earnings are also net of taxes on a mark-to-market, not a taxable, basis. The outflows are payments upon age retirements, disability and early retirement, job change and early release on hardship grounds. The Chart 30 clearly shows that all projected flows increase in real dollars and projected net inflow remains positive.

Chart 31 shows the same flows as proportions of projected GDP. Inflows show a general very slight downwards trend as a percentage of GDP, earnings are also fairly flat in these terms, but projected superannuation assets continue to rise as a proportion of GDP from around 100 per cent initially strongly and then more gradually currently to just under 150 per cent.

Chart 30: Projections of aggregate superannuation flows (accumulation phase),
real 2007-08 dollars

 

Source: Treasury projections using RIMGROUP.

Chart 31: Projections of aggregate superannuation flows (accumulation phase) and
total superannuation assets as percentages of projected GDP

 

Source: Treasury projections using RIMGROUP.

Table 2: Projection of total Australian superannuation assets by gender, $billion, nominal $
  Men Women Total Relative assets Relative average assets
2010‑11 $915 $455 $1,370 50% 63%
2015‑16 $1,310 $690 $2,000 53% 66%
2020‑21 $1,830 $990 $2,815 54% 69%
2025‑26 $2,460 $1,365 $3,830 55% 71%
2030‑31 $3,245 $1,835 $5,075 57% 73%
2035‑36 $4,235 $2,415 $6,650 57% 74%
2040‑41 $5,500 $3,145 $8,645 57% 75%

Source: Treasury projections using RIMGROUP.

Table 2 sets out the RIMGROUP projections of aggregate assets in nominal terms as markets tend to work in nominal terms. The relative assets column gives the projected relative aggregate superannuation assets of women as a proportion of those held by men. The next column, headed relative average assets, compares the average superannuation assets of women with superannuation to those held by men with superannuation.

There are other projections published of aggregate superannuation assets. For example the Rice Warner projections24 for 2020 (only go to 2022) are $3,048 billion in 2007-08 dollars. On a comparable constant dollar basis, this is almost 50 per cent higher than figure in the table above. However, the latest Rice Warner projection is almost 40 per cent higher than their corresponding projection of late 200625. The latest KPMG projections26 are much closer to latest Rice Warner projections than to RIMGROUP.

Distributions at 2010-11, 2020-21, 2030-31 and 2040-41 by gender age and income

Table 3: Projection of average superannuation assets by gender and income decile
Decile 2010-11 2020-21 2030-31 2040-41
Women Men Women Men Women Men Women Men
2 $47,750 $70,400 $56,800 $81,750 $69,600 $98,950 $82,650 $120,350
5 $64,800 $101,150 $94,300 $141,200 $126,750 $185,750 $160,900 $234,150
8 $116,200 $193,000 $194,250 $289,950 $272,500 $383,650 $347,500 $477,750
10 $257,600 $458,750 $427,350 $617,100 $589,000 $766,950 $738,800 $935,800
All $126,750 $211,200 $201,800 $290,150 $276,250 $368,600 $347,500 $453,950

Source: Treasury projections using RIMGROUP.

Table 3 presents more detail on the distribution of the RIMGROUP projections by gender and decile; again the analysis presents averages, in constant 2007-08 dollars, for those with some superannuation. The improving relativity of women’s balances is again seen. Within each decile real balances rise sharply. However the strong differences by decile are largely locked in and in cases widened. Of course retirement incomes may not be as widely spread, as the targeted age pension smoothes some of the differences. However assets outside superannuation will also be relevant. Rothman (2007) provides RIMGROUP based projections of adequacy, including assets both within and outside superannuation.

Table 4 presents further detail of the RIMGROUP projections by gender and age range; the analysis presents averages for decile 5, in constant 2007-08 dollars for those with some superannuation.

Table 5 presents average payouts upon age retirement for those with superannuation, again in constant 2007-08 dollars. Again it is apparent that the rise for women is faster than for men. In 2040-41 the average payout for women is 67 per cent that for men. This is different to the 75 per cent ratio for average balances, probably reflecting the fact that the average age at retirement for women is lower than for men.

Table 4: Projection of average superannuation assets for decile 5 by age group and gender
  2010-11 2020-21 2030-31 2040-41
Age Women Men Women Men Women Men Women Men
20‑24 $6,000 $8,000 $7,000 $9,500 $8,500 $11,000 $10,000 $13,500
25‑29 $24,000 $27,500 $21,500 $26,000 $25,500 $30,500 $30,500 $37,000
30‑34 $48,000 $53,500 $42,000 $51,000 $50,000 $60,500 $60,000 $72,500
35‑39 $54,500 $80,500 $65,500 $87,000 $67,500 $96,000 $80,500 $114,500
40‑44 $62,500 $104,500 $90,000 $130,500 $89,500 $140,500 $106,500 $167,500
45‑49 $76,000 $129,000 $106,500 $179,000 $127,000 $203,500 $139,500 $233,500
50‑54 $99,000 $168,500 $138,500 $239,000 $184,000 $294,000 $197,500 $331,500
55‑59 $135,500 $198,500 $183,500 $286,500 $245,000 $375,000 $299,000 $439,000
60‑64 $200,500 $273,500 $266,000 $353,500 $384,000 $479,500 $530,000 $606,500

Source: Treasury projections using RIMGROUP.

Table 5: Projection of age retirement payouts by gender
  Women Men Total
2010‑11 $148,500 $287,000 $204,500
2020‑21 $199,000 $330,000 $256,000
2030‑31 $263,500 $432,000 $336,500
2040‑41 $324,000 $485,000 $395,000

Source: Treasury projections using RIMGROUP.


24 Superannuation Market Projections Report, Rice Warner Actuaries, December 2007.

25 Superannuation Market Projections Report, Rice Warner Actuaries, September 2006.

26 ‘Super funds to reach $3.3 trillion by 2017 – but beware the fall’, KPMG media release of 13 December 2007.