INTERACTIVE

Graphic: Supersizing retirement

Australia’s superannuation retirement system has grown significantly in recent years, reaching A$2.1 trillion in total assets as of June 30. The system is designed to provide employees with retirement savings via mandated contributions from both employers and participants. Self-managed accounts have grown as tax advantages make them attractive savings options, particularly for more-well-off investors.
Rapid growth: Assets grew 3.5% from 2015 − 98% since June 2009 − and equaled 127% of Australia’s gross domestic product. Similar in size to the U.S. Social Security trust fund (A$3.9 trillion) and Japan’s national pension (A$1.7 trillion), as of June 30.
Account consolidation: The number of accounts totaled more than 29 million in June. Australia’s total population is only 24.3 million. There has been consolidation in recent years, with only self-managed accounts increasing.
Home cooking: Asset allocation has not changed much in recent years. Domestic invest- ment has remained strong, with most equity and fixed-income assets invested in Australian companies. Alternatives have had a growing influence.
Looking ahead: Demographic data show an aging workforce, with an increase in retirements ahead. Contribution growth has slowed as wage growth has weakened and full-time employment has declined. Minimum contributions are slated to increase to 10% in 2021, then by 0.5% every year until 2025.
Sources: Bloomberg LLP, Australian Prudential Regulation Authority
Compiled and designed by Charles McGrath and Gregg A. Runburg