The superannuation industry will grow to $3,202 billion by 2022, although investors should not expect the extraordinarily high returns of the past two years to continue, according to a new report by actuarial firm Rice Warner.
Of the $3,202 billion (in today’s dollars), the Superannuation Market Projections Report, based on a sample seven million super accounts, expects $1,256 billion — 39 per cent of the market — to be held in post-retirement assets.
The report stated that there will be a significant shift from lump sums to pensions as members opt to maintain their benefits in a tax-free environment. Members aged 60 and over are expected to shift their super into pensions via the Transition to Retirement process.
The report also stated that the pension reforms announced in the May 2006 Federal Budget will make the super market 60 per cent larger than it would have been without them.
Average member balances, which have increased from $45,700 to $74,700 in the past two years, will grow to $184,800 by 2022 (or $118,600 in today’s dollars).
The report also stated that there will be few — if any — remaining corporate funds by 2022.
