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Average superannuation balances in Australia
can be expected to continue to grow for
many years as the private retirement income
system matures. The Australian compulsory
superannuation system is still relatively
immature in the sense that many individuals
have had superannuation coverage only since
the commencement of industrial award-based
superannuation in the late 1980s and the
introduction of the SG in 1992. The SG rate
only reached 9 per cent in 2002. It is currently
legislated to increase to 12 per cent by 2019 but
there is legislation currently before the Parliament
that proposes a two-year pause in the scheduled
timetable of increases.
Given that the system is still maturing in terms
of reaching the proposed long-term rate of
contributions and many Australians have received
compulsory contributions for not much more than
20 years, the majority of adult Australians still
have relatively modest levels of super.
It will be another 35 years or more before most
individuals will have the full beneft of a mature
SG system. Even then, a small but signifcant
minority, principally those who have had little or
no paid labour force experience since 1992 or
who have ‘cashed out’ their super beneft, will
have no superannuation at all.
THE IMPACT OF THE GFC
As superannuation fund members are very
much aware, the global fnancial crisis (GFC) had
an impact on the retirement savings of many
Australians. It is generally regarded that the GFC
had run its course by the end of 2008 or the frst
half of 2009.
The variation in investment earnings has
impacted on the average superannuation savings
fgures in the various ABS surveys undertaken
since 2005-06. The variations have been very
signifcant from year to year.
The average return in 2011-12 was 0.3 per
cent, but this was followed by relatively strong
average investment returns of 16.7 per cent in
Average balances achieved in 2011-12 were
$82,615 for men and $44,866 for women. These
averages are well up on the balances of $56,400
for men and $23,900 for women, prepared for
ASFA in regard to 2003-04. Figure 1 provides
Balances grew because of continued
contributions and positive investment earnings
over the period, despite the impact of the GFC.
As shown by the table, there is not much
difference in the incidence of superannuation and
average superannuation balances prior to age 25.
However, after this age, there is an increase in
the disparity between men and women in both
the incidence of having superannuation and the
average balance of accounts. By around age 60,
the average superannuation balance for men is
about twice that for women.
For both men and women, the average balance
increases steadily by age group up until about
age 60, when average balances start to decrease.
The decrease is due to both individuals starting to
draw down on their superannuation and larger
proportions of older age cohorts, particularly
women, not ever having superannuation.
The calculation of average balances for only
those with superannuation would result in
somewhat higher fgures due to the exclusion
of the substantial proportion of people with nil
superannuation. Around 26.1 per cent of males
reported nil superannuation, and 34.6 per cent of
women had no superannuation. These fgures are
down signifcantly from two years earlier, when
around 31.6 per cent of males reported having
no superannuation and 38.5 per cent of women
had no superannuation, showing the continued
impact of compulsory superannuation.
The average super balance for those aged 60
to 64 is a reasonable proxy for average retirement
payouts given that most individuals retire around
their early 60s. With average retirement payouts
in 2011-12 in the order of $197,000 for men and
only $105,000 for women, it is clear that most
recent retirees will need to substantially rely on
the Age Pension in their retirement.
However, these average fgures are considerably
higher than those that applied in 2005-06, which
were of the order of $136,000 for men and only
$63,000 for women. The increase in average
balances for women is particularly signifcant.
Average balances will rise in the future as the
compulsory superannuation system matures.
In addition, cohorts of women with more paid
labour force experience than their mothers and
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