The super funds with the largest retiree share by 2032

19 July 2023
| By Rhea Nath |
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Two super funds are expected to have almost two-thirds of their assets held by retirees by 2032, according to research by Rainmaker Information.

Presently, super fund members aged 65 or older own some 40 per cent of Australia’s $3.3 trillion in super assets. Rainmaker Information’s projections suggest this will rise to 55 per cent by 2032 and potentially cross 70 per cent by 2042. 

The retiree funds under management (FUM) ratio for APRA-regulated funds has increased by over one-third since 2015.

According to the research house, retirees currently own around $625 billion in assets within APRA-regulated funds. If super savings double to $7 billion in the next decade, APRA-regulated funds could hold $1.8 trillion in retiree assets alone.

Looking specifically at individual funds, projections for the retiree share in each of the 10 largest super funds by FUM saw two in particular projected for a large increase. 

Aware Super and Colonial First State (CFS) FirstChoice could both see retirees make up 60 per cent of their funds’ membership by 2032, Rainmaker said. This would be up from 29 per cent and 46 per cent, respectively.

The two funds have already seen their retiree share grow with Aware Super’s share doubling since 2017 from 14 per cent to 29 per cent and CFS rising from 29 per cent in 2017 to 46 per cent.

  Retiree share 2017 Retiree share 2022 Projected retiree share 2032
Aware Super 14 29 60
Colonial First State FirstChoice 29 46 60

Source: Rainmaker, APRA

At Australia’s two largest super funds – AustralianSuper and Australian Retirement Trust – their projected retiree share by 2032 is expected to be far smaller at 33 per cent and 31 per cent, respectively. This is up from 20 per cent at each currently.

The two funds both have over $200 billion in funds under management.

UniSuper, which currently has $92 billion in funds under management, is projected to rise from 31 per cent to 44 per cent by 2032. 

Alex Dunnin, executive director of research and compliance, said: “Not-for-profit super funds, which have been increasingly dominant, are expected to extend their influence into retirement superannuation as well.

“This shift could significantly impact the retail superannuation segment, which has historically controlled a substantial share of this lucrative market.

“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.”

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