Moderate your super expectations
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.
AUTHOR
Mike Taylor
Recommended for you
The central bank has released its decision on the official cash rate following its November monetary policy meeting.
Melbourne advice firm Hewison Private Wealth has marked four decades of service after making its start in 1985 as a “truly independent advice business” in a largely product-led market.
HLB Mann Judd Perth has announced its acquisition of a WA business advisory firm, growing its presence in the region, along with 10 appointments across the firm’s national network.
Unregistered managed investment scheme operator Chris Marco has been sentenced after being found guilty of 43 fraud charges, receiving the highest sentence imposed by an Australian court regarding an ASIC criminal investigation.
