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Alternative Market Briefing

Report claims Australia’s superannuation strength offers model for Asian fund management industry

Monday, April 16, 2012

Beverly Chandler, Opalesque London: New research from Cerulli Associates finds that the Australian model of encouraging superannuation or the building of pension funds under management has led to a strong and successful fund management industry.

Currently Australia enjoys some US$1.81 trillion under management in their funds industry and Cerulli believes, the country offers a lesson for Asia’s asset management industries that they could moderate their learning curve by observing how Australia built a thriving sector supported by a large pensions industry.

In their latest report The Cerulli Edge: Asia-Pacific Edition, 2Q 2012 issue, the firm says that the key to the success of Australia's fund management industry is the superannuation (what pension funds are called in Australia), which account for 70% of total industry assets.

"The super had $1.28 trillion (A$1.26 trillion) in assets as of December 2011, from a population of just 22 million which is about the size of Beijing" Cerulli says. Their findings included the fact that mandatory contributions are indispensable to building a flourishing pension fund sector. "In Australia, the "super guarantee" has been in place since 1992 and today employers must contribute 9% of an employee's salary. This will be raised gradually, likely to 12% by 2020. As a result, super assets are forecast to grow exponentiall......................

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