Aust Super on the fast track
Australia's $380 billion superannuation industry has been pinpointed as one of the fastest growing retirement fund assets in the world by a new report.
Australia joins Japan and Singapore as the countries forecast to have the strongest growth as the pacific region becomes the fastest growing region for pensions, expected to rise 55 per cent in the next four years to US$2.3 trillion.
Australia's $380 billion superannuation industry has been pinpointed as one of the fastest growing retirement fund assets in the world by a new report.
Australia joins Japan and Singapore as the countries forecast to have the strongest growth as the pacific region becomes the fastest growing region for pensions, expected to rise 55 per cent in the next four years to US$2.3 tril-lion.
According to the report, compiled by US-based InterSec Research, Australia will remain the seventh biggest superannuation market in the world but will grow at a faster rate than the six countries with more superannuation funds under manage-ment. While the numbers provided by InterSec differ wildly from those supplied by the Australian Prudential Regulation Authority (APRA), its growth is tipped to be among the world's fastest over the next four years. The report estimated Australia's superannuation funds under management at about A$200 billion, while APRA says the total was much closer to A$380 billion at the end of 1998.
The report says global retirement fund assets are set to rise more than 39 per cent to almost US$24 trillion in the next four years. Europe's pension assets are tipped to jump about 44 per cent to almost US$3.9 trillion, while the US pension market will expand 33 per cent to more than US$8.5 trillion. Pension as-sets in Latin America will climb 55 percent to US$198 billion, and in Africa, the Middle East and other Asian nations by 55 per cent to US$93 billion.
In an effort to capitalise on the growth, US financial services groups are form-ing alliances with financial services companies in Asia and Europe, while inter-national banks and insurers are buying US fund companies to gain access to the world's largest pension market. Even with its slower growth rate, the US will represent 56 per cent of the global pension market in 2003, down from 58 per cent currently.
Many of the ventures cooked up over the past few years are focused on Japan, the world's third biggest pension market behind the US and the UK. Japan's pension assets are forecast to increase 43 per cent to almost US$1.7 trillion by 2003, according to InterSec.
World's 15 biggest pension markets ($US billion):
1998 2003
US 6410 8560
UK 1350 1930
Japan 1170 1680
Netherlands 410 560
Canada 320 440
Switzerland 290 380
Australia 130 280
Germany 130 180
Sweden 100 160
Brazil 70 100
France 70 110
Denmark 70 120
Italy 60 100
Singapore 40 90
Ireland 40 70
Ends
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