Overview

As at 30 June 2007, the total Australian superannuation assets was $1153.3 billion, or a little under $1.2 trillion. The growth in Australia’s superannuation assets over the last decade has been dramatic, as the following table shows:

Growth in superannuation assets

Source: APRA

Industry structure

The following table shows the structure of the superannuation industry, by assets under management:

Structure of the superannuation industry as at 30 June 2007

Source: APRA

Most Australian superannuation funds are accumulation funds. An accumulation fund is one in which the benefits are made up of contributions and associated investment earnings only.

Policy framework

Superannuation is one component of the overall retirement income policy framework. It has been long-standing policy that Australia’s retirement income will be based on three pillars, namely:

• the social security age pension
• compulsory superannuation contributions under the superannuation guarantee regime, and
• additional savings, both inside and outside the superannuation environment.

Regulatory and governance framework

Most superannuation funds are in the legal form of a trust, whose operations are overseen by boards of trustees. These trustees are subject to the provisions of the Superannuation Industry (Supervision) Act 1993.

The principal regulatory body is the Australian Prudential Regulation Authority (APRA). The Australian Securities and Investment Commission plays a significant role in overseeing the consumer-related aspects of the superannuation industry. The Australian Taxation Office administers the provisions of the tax legislation that relate to superannuation funds and benefits, and is the sole regulator of self-managed superannuation funds (a type of small fund).

Recent review

The Parliamentary Joint Committee on Corporations and Financial Services reviewed the operation of the superannuation industry in 2006–07. It noted in its report, The Structure and Operation of the Superannuation Industry, that although Australia currently had a world-leading superannuation system, there were several areas that could be further developed. These included the standardisation of both the pricing of members’ savings and methods for the disclosure of advertising costs.

Issues for the 42^nd Parliament

The briefs in this section canvass some of the major issues related to superannuation that may arise in the 42^nd Parliament. These include the adequacy of superannuation saving, the Future Fund, and the second intergenerational report. A brief on military superannuation can be found in the Defence, Security and Terrorism section.

Library documents
Leslie Nielson, ‘Superannuation and taxation 2007–08’, Research Paper, no. 2, Parliamentary Library, Canberra, 2007–08.